Most Republicans in the U.S. House have expressed their disinterest in extending the expiring tax credits associated with the Affordable Care Act (ACA). However, the party, including its Texas members, remains divided on a viable alternative as they approach an important midterm election year.
The subsidies, which have been a focal point of recent federal funding discussions, continue to provoke debate in Congress following the government shutdown. With the House recessing for the holidays and no resolution evident, the enhanced premium tax credits that make healthcare more affordable for millions are likely to expire on December 31.
On Wednesday, Texas’ entire Republican delegation backed a healthcare bill that would broaden association health plans, impose new regulations on pharmacy benefit managers—who act as intermediaries between drug manufacturers and insurers—and support cost-sharing reductions for low-income ACA participants, all while allowing the subsidies to lapse.
Earlier in the day, a faction of four dissenting Republicans collaborated with House Democrats to secure a floor vote next month concerning a temporary extension of the tax credits, thereby keeping the matter in public discourse through January.
Since their introduction in 2014, premium tax credits have enabled the federal government to assist insurers in reducing costs for individuals obtaining coverage via the ACA marketplace. During the COVID-19 pandemic, Congress expanded both the credits and eligibility, resulting in a dramatic increase in ACA enrollment, particularly in Texas. In 2021, enrollment stood at 1.3 million, which surged to 3.9 million by this year.
The elimination of these enhanced tax credits would almost double the average premium costs for subsidized enrollees across nearly every congressional district in Texas, according to an analysis from the health policy organization KFF. Insurers in the state have already proposed premium increases set to take effect with the expiration of the subsidies, potentially leading to hundreds of thousands losing their insurance coverage.
Experts warn that Texas will feel the brunt of the impact from the expiring subsidies. KFF projects that nearly 4 million Americans could drop their coverage, with over a quarter of these individuals residing in Texas.
Despite this, the majority of Texas Republican representatives remain steadfast in their opposition to the subsidies. U.S. Rep. Roger Williams, R-Willow Park, stated, “I’m not going to vote for anything that has any existence of Obamacare. Nobody in my district wants any kind of extension on Obamacare.”
Republicans contend that individuals exploit these credits to defraud the government, resulting in wasted taxpayer funds and benefiting insurance companies without addressing the fundamental issue of escalating healthcare costs.
U.S. Rep. Jodey Arrington, a Republican from Lubbock who chairs the House Budget Committee, criticized the Democrats’ push for an extension of what he labeled a “COVID-era, fraud-ridden subsidy.” He emphasized that the government itself has been the problem and that their proposed solutions would genuinely enhance affordability for the American populace.
Even with their unified stance in Wednesday’s vote, Texas Republicans have not reached a consensus regarding the subsidies. While most members advocate for their repeal, U.S. Rep. Monica De La Cruz, R-Edinburg, supported a bipartisan initiative earlier this month to extend the tax credits for another year, introducing measures to prevent fraud and allowing for a potential additional yearlong extension. This plan also garnered support from U.S. Reps. Henry Cuellar, D-Laredo, and Vicente Gonzalez, D-McAllen.
“Unfortunately, that has not come to the floor,” De La Cruz expressed on Wednesday. She reiterated her backing for the Republican alternative, asserting it was “a first step to making health care affordable for all Americans, not just those on the exchange.”
De La Cruz engaged in bipartisan negotiations to develop this plan, recognizing the importance of healthcare in her South Texas community. Her district, while still a challenging target for Democrats, is the most competitive Republican-held district in the state.
Republicans are apprehensive that the expiration of the subsidies could adversely affect their prospects in the 2026 midterms, particularly as Democrats aim to leverage issues surrounding healthcare affordability. Four Republicans from districts deemed vulnerable to Democratic challenges joined a Democratic-led petition to compel a vote extending ACA subsidies for three years. This petition secured enough signatures on Wednesday, mandating a vote in January.
While De La Cruz refrained from committing to a specific vote on the three-year ACA subsidy extension, she indicated that significant developments may occur before the House reconvenes post-holidays. “I believe that between now and then, leadership is going to work very closely with those congressmen that are in vulnerable seats … like myself, to find a place for us to have input into health care reform,” she said. “What we ultimately want to do is bring a health care package that works not only for our community but for all Americans, which ultimately means lower prices.”
Both the Republican healthcare proposal and the Democrats’ initiative to extend subsidies will encounter challenges in the Senate. A bipartisan coalition is currently working on a plan to tackle the impending subsidy expiration, but further votes are not anticipated until the new year. Nonetheless, some Senate moderates have suggested that the House’s discharge petition could bolster their efforts.
The narrow bill that the House passed on Wednesday aims to fund cost-sharing reduction payments starting in 2027, which Republicans assert will help lower deductibles and other out-of-pocket costs for ACA enrollees, a funding avenue that was terminated by the Trump administration in 2017.
To help reduce costs for employers, the bill allows small businesses and self-employed individuals to participate in association health plans, enabling them to purchase coverage collectively. Additionally, it proposes increased oversight of pharmacy benefit managers by mandating the reporting of data concerning drug utilization and expenditure.
“It’s important, but it’s only a first step,” remarked U.S. Rep. Nathaniel Moran, R-Tyler, regarding the package. “Quite frankly, it does not include a whole lot of the more robust healthcare policies that we’ve already vetted.”
Importantly, the bill does not reallocate funds from ACA subsidies to health savings accounts, a measure that has gained traction among some Republicans as a preferred healthcare strategy.
U.S. Rep. August Pfluger, R-San Angelo, is sponsoring an alternative legislative proposal that would do just that. Dubbed the More Affordable Care Act, this bill seeks to allocate funds to “Trump Health Freedom Accounts,” which Pfluger argues will empower consumers with greater autonomy and transparency in their healthcare choices.
“In this plan, it would go to their health savings account so that they would get it directly,” said Pfluger, chair of the influential Republican Study Committee. “They could see that as a tangible way to take control and be able to have a little more transparency.”
All of Texas’ Democratic representatives opposed the healthcare bill on Wednesday, with some highlighting a provision that would restrict access to healthcare coverage for abortion services.
Some Democrats urged House leadership to conduct an immediate vote on the ACA subsidy extension following the petition’s success, rather than postponing it until January.
“We have the votes to pass a three-year extension of the ACA tax credits, but Mike Johnson is going to send the House of Representatives home instead,” U.S. Rep. Veronica Escobar, D-El Paso, stated on social media. “This issue should be addressed with the urgency it deserves, and Mike Johnson is falling woefully short.”
