(Bloomberg) — The Republican-led Congress left Washington for a year without a deal to extend Obamacare subsidies, giving Democrats a strong political attack line heading into an election year squarely focused on affordability.
Health care premiums for more than 20 million Americans will more than double on average in 2026, which risks putting insurance out of reach for many voters already concerned about the costs of housing, food, utilities and other expenses.
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When lawmakers return to the Capitol next month, they have less than two weeks to resolve the issue before open enrollment ends Jan. 15.
Photographer: Graeme Sloan/Bloomberg
“This is the Titanic. It’s over,” House Democratic Leader Hakeem Jeffries said Thursday. “These people promised to reduce the cost of living on day one, but they failed to do it in the first year.”
The skyrocketing premiums disproportionately affect GOP districts and leave many Republicans politically vulnerable, including Rep. Mike Lawler of New York. This week he accused his party leaders of “political malpractice” over their handling of the issue.
Pennsylvania’s Brian Fitzpatrick, who represents Bucks County outside Philadelphia, described a cabal of moderates as trying to “drive this process” by running around House Speaker Mike Johnson to force a vote in January on a three-year extension favored by Democrats.
Even the congressman tasked with leading the House Republican campaign arm, Richard Hudson of North Carolina, acknowledged that the party has struggled to communicate effectively on health care. Democrats, he said, have made the subsidies, which affect only a small subset of voters, resonate.
“The majority of all Americans have seen their premiums go up, and they all think it’s because this little Covid subsidy only affects 7 percent of people,” Hudson said. “This is a messaging issue, not a policy issue.”
Democrats have focused relentlessly on raising Obamacare premiums for six months, making it the centerpiece of their demands during this fall’s six-week government shutdown. They eventually gave up to end the shutdown, but managed to bring the issue to the fore.
“Objectively, we’re in a better political position in December than we were in August,” said Sen. Brian Schatz, D-Hawaii.
GOP fractures
Johnson and his leadership team earlier this week denied party moderates a vote on a compromise extension of premium tax credits, prompting Lawler, Fitzpatrick and two others to revolt and force a January vote on the three-year extension.
Now, Republicans must decide whether to stand firm against the subsidies, which conservatives say are too costly, or give in to powerless Democrats.
They have received little guidance from President Donald Trump, who has largely stayed off the topic and avoided what is fast becoming the defining issue of the midterms.
“You’ve seen Trump say that accessibility is a ‘scam,'” said Rep. Suzan DelBene of Washington state, the Democratic campaign chief of operations. “The reason people are responding strongly to that is because that’s not what people see in their lives.”
Republicans argue that the Affordable Care Act, or Obamacare, has driven up health care costs over the past 15 years and that bailing out a failed Democratic program is not the answer.
Photographer: Graeme Sloan/Bloomberg
The GOP passed a bill to green-light lower cost and less comprehensive plans to compete with Obamacare. All Democrats opposed it and it has no chance of passing the Senate.
The Senate GOP offered its own plan to strengthen pre-tax savings accounts to help all Americans with out-of-pocket expenses, which Democrats also opposed.
“Democrats don’t want a solution, they want a talking point for the campaign,” Johnson told reporters Thursday. “The Republican Party is the one with the solutions, the Democrats are the ones who broke America’s health care system.”
Possible business
With pressure mounting on Republicans, a vote in January on a three-year extension of the subsidies offers a long shot at a bipartisan deal to renew them.
The House is certain to pass the bill with a handful of Republicans joining all Democrats in supporting it. Senate Majority Leader John Thune said he would not vacate his chamber but could become the vehicle for a bipartisan deal.
“I’m not saying it’s likely and I’m not saying it’s impossible. I think right now it’s somewhere in the middle,” Thune said Thursday.
Ideas floated among moderates in both parties include income caps, anti-fraud measures and a commission to recommend broader health care changes.
However, any deal must happen quickly. Open enrollment for plans starting in January ended Monday, and open enrollment ends Jan. 15.
Nick LaLota, a New York Republican, said party moderates had been in talks with their leaders to block a vote on the three-year extension in exchange for a vote on a GOP compromise plan with a shorter extension.
Looming costs
The nonpartisan Congressional Budget Office estimates that nearly 4 million people will lose insurance entirely when the increased subsidies expire.
If fewer people buy health care policies because of higher costs, insurers will receive less revenue. And as healthy people choose to risk going without coverage while the sickest stay with plans, insurance becomes more expensive. Insurers such as Centene Corp., Molina Healthcare Inc. and Oscar Health Inc., stand to lose the most.
UnitedHealth Group Inc., Elevance Health Inc. and Cigna Group also sell exchange plans that would be affected if the subsidies expire. Hospitals are also under greater financial pressure as patients end up without coverage and unable to pay for their care.
