Republicans Divided Over Extending ACA Funding Amid Fear of Premium Hikes
TL/DR –
Republican leaders are facing pressure to extend funding for the Affordable Care Act (ACA) that is set to expire at the end of the year, a move that could prevent insurance premium hikes and millions of Americans losing health coverage. However, the proposal faces opposition from conservatives who argue it would be too costly to continue the premium tax credits, which cost over $30 billion per year. The Congressional Budget Office estimates that about 5 million Americans will lose their insurance by 2034 if the funds are not extended.
Republicans Grapple with Calls for Extending ACA Funding
Republican leaders are wrestling with urgent requests from party members to continue funding for the Affordable Care Act (ACA), set to end this year. Their concerns are primarily centered on potential insurance premium hikes and Americans losing health coverage.
Yet, resistance from conservatives who disdain “Obamacare” and worry about the expense of maintaining the premium tax credits, part of a Covid-19 response, remains. These credits cost over $30 billion annually.
The nonpartisan Congressional Budget Office estimates that about 5 million Americans will lose insurance by 2034 if the funding ends.
Republican representatives are in disagreement over how to address ACA subsidies. Some express readiness to act, while others prefer inaction.
GOP Concerns Over ‘Political Penalty’
Trump’s former pollster Tony Fabrizio authored a memo last week, warning Republicans may face a “political penalty” in 2026 midterm elections if the ACA funding expires as planned. He noted that extending health care tax credits enjoys broad popularity even among Trump and swing voters.
Republicans from both deep-red and competitive areas express the desire to continue the ACA funds as insurers threaten premium raises.
Sen. Mike Rounds supports the idea of extending funds. He believes a fair solution for people dependent on ACA, and with no alternative, is finding offsets agreeable to Democrats.
The ACA funds were implemented by Democrats in a Covid-19 stimulus bill in 2021 and extended until 2025. This subsidy enhancement caps premiums at 8.5% of income for those above 400% of the federal poverty level.
CBO Projects High Cost for Permanent Subsidies
The CBO and Joint Committee on Taxation project a $335 billion cost over a decade for permanent subsidies. Despite the cost, some Republicans, like Sen. Tommy Tuberville, call for considering ACA funding extension while being cautious about financial implications.
Resistance comes from some Republicans on the Senate Finance Committee, citing cost concerns, and others who believe Congress should use the opportunity to move beyond the ACA.
Democrats Criticize GOP, ACA Funds in Trump’s Bill
The Democrats reproach the GOP for omitting an extension of ACA funding in Trump’s bill. They argue the GOP is responsible for potential coverage losses.
Republican Sen. John Cornyn is not against an ACA funding extension and considers modifying thresholds. He suggests pairing it with policies aimed to “eliminate the waste and fraud” in health care.
ACG Subsidy Extension ‘On The Radar’
The Republican leadership is undecided on addressing the issue. However, House Speaker Mike Johnson acknowledges it’s on the radar for discussion. Senate Majority Whip John Barrasso is open to negotiation, despite criticizing Democrats’ decision to increase this funding under Biden.
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