The Senate Goes Back to Square One on Health Care Subsidies After Dueling Proposals Fail

After several weeks of squabbling and two votes on health care in the Senate, lawmakers are back to the drawing board on addressing the Affordable Care Act subsidies set to expire at the end of the year.

The Senate struck down both a Democratic and a Republican-backed proposal on health care on Thursday. Majority Leader John Thune promised a vote on the Democratic proposal, which would have extended the tax credits by three years, as part of a deal to reopen the government in November.

Minority Leader Chuck Schumer told reporters that the health care crisis belongs squarely to Republicans after the Democratic measure failed 51 - 48 (both bills would have needed 60 votes to advance). Republican Sens. Josh Hawley, Dan Sullivan, Susan Collins and Lisa Murkowski voted to advance the bill.

“Our bill is the last train to leave the station,” Schumer said on the floor ahead of the vote. “We’ll not have time to try again before premiums shoot through the roof next year. This is not a political fight. This is not a symbolic vote. This is a life and death vote.”

Thune said that there was never a clear direction for the Democrats’ proposal, which he considered a “political issue” for Democratic leadership. Still, Thune said he does see a path forward for some bipartisan negotiation on health care.

While Thune wouldn’t rule out the possibility of passing a party-line bill without Democratic buy-in, he said he’d like to see the two sides come to an agreement.

“The Senate is doing what we can to fix this,” Thune told reporters ahead of the vote. “I have expressed this and so have many of my colleagues, everyone needs to sit down and figure out a path forward that includes reforms. And there are some Democrats who are interested in reforms.”

Still, any bipartisan negotiation is likely to begin after the credits expire, meaning that the more than 20 million Americans who receive the COVID-era ACA tax credits will see price spikes. But both sides are motivated to find a solution as polls find Republicans losing the messaging battle on affordability and health care ahead of the 2026 midterms.

Republicans have floated a number of their own proposals on health care, including the bill that failed 51-48 on Thursday. Sen. Rand Paul was the lone Republican to vote no. The proposal, introduced by Sens. Bill Cassidy and Mike Crapo, would have done away with the tax credits and repurposed that money into new health care savings accounts for people who purchase certain ACA plans.

Cassidy told reporters Thursday morning that he hopes Democrats come to the negotiating table.

“Let me give you nirvana as it regards to this,” Cassidy said, “that actually Democrats have realized that a $6,000 deductible is not going to work. That they would acknowledge that the plan we’re proposing builds upon a framework that they set up.”

Republicans are also considering several competing proposals, including one by Sen. Roger Marshall to extend subsidies for a year, one by Sen. Jon Husted to extend subsidies by two years and enact reforms and one by Sens. Susan Collins and Bernie Moreno that would also extend subsidies by two years but implement different reforms. Another by Sen. Rick Scott would end the subsidies in favor of health savings accounts.

Schumer told reporters that none of the Republican-led plans measured up to the clean, three-year extension proposed by Democrats.

“Republicans are fighting with each other. They can’t even come up with a plan,” Schumer said Wednesday. “They’re just so embarrassed that they have no plan that they put in a really bad plan.”

After the Cassidy-Crapo bill failed, Sen. Jim Justice told reporters that he fears Republicans’ scattered plans will become a problem for the party ahead of the midterms.

“The messaging is not resonating with a lot of voters that we needed to resonate with,” Justice said. “If you’re not concerned, you’re living in a cave. If you’re not watching the elections that are happening all the time, then you’re living in a cave.”

Sen. Lisa Murkowski, who voted for both proposals, called Thursday a positive step towards a solution to the expiring credits.

“Sometimes around the Senate, we have to demonstrate what we can’t do first before we can get to what we need to do,” she told reporters. “Today was the first step in that process of demonstrating what we can’t do now, let’s get on with it.”

Republicans in the House are also weighing plans to tackle health care costs. Speaker Mike Johnson presented 10 options to Republican members in a Wednesday meeting, including health savings accounts, pharmacy benefit manager reform and price transparency. The speaker’s suggestions did not include extending Affordable Care Act subsidies.

House Majority Leader Steve Scalise told reporters Wednesday that leadership plans to introduce a health care bill incorporating some of those suggestions next week.

A number of other Republican-backed proposals are also gaining traction in the House. A bipartisan group of moderates led by Rep. Brian Fitzpatrick filed a discharge petition on Wednesday to force a vote on extending the subsidies for two years with some reforms.

Democratic leadership also introduced a separate discharge petition that would extend the subsidies for three years. Yet another discharge petition sponsored by Republican Rep. Jen Kiggans and Democratic Rep. Josh Gottheimer looks to extend the tax credits for one year with some reforms.

Rep. Kevin Kiley, who signed onto both the Fitzpatrick petition and the Gottheimer bill, said that members know time is of the essence. Kiley said he expects to see a House vote on extending the subsidies in some capacity next week.

“I think it’s the time-sensitive matter,” Kiley told NOTUS. “I think we’re going to get a vote next week. We’re encouraging the speaker to bring one of these bills to the floor, and then there’s also a discharge petition going. And if it gets a vote, I think the House will work its will. There’s majority support for some sort of temporary extension.”

Still, Sen. Dick Durbin told reporters Wednesday that talks on reform should come later, when health care costs aren’t at imminent risk.

“The bottom line is, millions of Americans are going to see their costs go so high that they can’t afford it,” Durbin said. “I think we got to take care of them first and talk about reform after that.”