Republicans are pushing for tax credit alternatives to Obamacare as the deadline approaches
An Obamacare sign is displayed outside an insurance agency in Miami, Florida on November 12, 2025.
Joe Raedle | Getty Images
With expanded Obamacare tax credits set to expire at the end of the year, Republicans are proposing new alternatives aimed at reducing health care costs.
Their window of opportunity to do so is closing quickly—leaving middle-class Americans in uncertainty.
The White House is expected to make an announcement this week on efforts to either renew or replace the Affordable Care Act’s expanded premium tax credits, according to Treasury Secretary Scott Bessent. However, MS Now late reported that the announcement was delayed in part due to congressional backlash, according to two White House officials.
For Shana Verstegen and her husband, the news couldn’t come soon enough. The couple buys insurance through the ACA exchange and faces a 50% premium increase on their family plan in 2026 if the expanded tax credits are not renewed by Congress.
“We looked at our expenses, and now it’s difficult because everything is already very expensive” and there’s little room to cut costs, said Verstegen, a fitness trainer from Madison, Wisconsin. “We look at some activities that our kids are doing and things like that.”
Verstegen traveled to Washington during the government shutdown to advocate for expanding financial assistance for middle-class ACA members like her family. Since the government reopened, she has been watching the discussions on Capitol Hill about so-called Obamacare tax credits with caution.
“I’m excited to see lawmakers finally sitting down and talking about ways to make health care more affordable. What frustrates me is that there is less than a month to do something,” she said.
John Thune, Senate Majority Leader, RS.D. promised Democrats that the chamber would vote on extending the expanded tax credits in mid-December as part of a deal to end a record-long government shutdown.
Dec. 15 is the deadline for the majority of Americans to sign up for ACA insurance in 2026, and as Congress headed home for Thanksgiving recess, there was no consensus on Obamacare’s debt funding or what those subsidies would look like.
GOP proposes cash payments
Some Republicans in the House of Representatives signed a bipartisan letter calling on Senate leadership to conduct negotiations involving members of both chambers to find a way to extend the expanded tax credits for a year.
The subsidies introduced during the Covid pandemic support middle-class students by limiting their share of premium payments to 8.5% of income.
According to the nonpartisan Government Accountability Office, the cost of expanding tax credits is more than $30 billion per year.
President Donald Trump has opposed expanding Obamacare tax credits, which he says funds the “money-sucking” insurance industry, saying in a post on his Truth Social platform: “The only health care I will support or approve is sending the money directly back to the people.”
Sen. Rick Scott, R-Fla., has introduced a bill that would give ACA enrollees cash through a health savings account called the Trump Health Freedom Account that they could use to pay for both premiums and health care expenses. Under the bill, the payments would take effect Jan. 1.
The current ACA subsidies are based on mid-range Silver plans as the benchmark coverage option. According to health organization KFF, these plans have an average deductible of just over $5,000.
Sen. Bill Cassidy, R-La., has proposed making the lower Bronze plan the benchmark for expanded subsidies while providing cash to offset the higher Bronze plan’s deductible. According to KFF, deductibles on the Bronze plan average over $7,000.
Cassidy told CNBC’s “Squawk Box” on Monday that his proposal would include subsidies for the lower plan and cap out-of-pocket premium costs at a level similar to a Biden-era proposal.
“But we use a cheaper policy so it’s easier,” he explained. “This gives us savings that we can put into a health savings account.”
Switching from a silver benchmark plan to a bronze plan without the expanded tax credits wouldn’t save participants much money.
For example, according to a KFF premium calculator, a 60-year-old couple in Florida making $86,000 would be eligible for a $0 premium for a 2026 Bronze plan with an increased tax credit. Without the credit, the same plan would cost $2,169 per month, or more than $26,000 per year.
Race against the clock
With Congress out for Thanksgiving recess, less than a month remains on the legislative calendar.
It may not be possible to not only pass an HSA funding measure but implement it when coverage begins next year, according to Sabrina Corlette, co-director of the Center on Health Insurance Reforms at Georgetown University.
“Conceptually, they’re talking about a radical restructuring of how the ACA marketplaces and tax credits work, and we’re literally just days away from people having to pay their January premiums to get their coverage,” Corlette said.
Oscar health CEO Mark Bertolini said a national plan in which the government or employers give consumers cash to buy their own insurance on the market is something he supports in the long term, but extending the expanded tax credits makes the most sense now.
“I think this is how they’re going to solve this problem so they can get past the midterms and have time to come up with a comprehensive plan,” Bertolini said.
The registration deadline ends on December 15th
Regardless of whether the tax credits are extended, the deadline to sign up for coverage remains in 2026 for now. For those who sign up on the Healthcare.gov exchange, there are just three weeks left. On some state exchanges, such as those for California and Massachusetts, the deadline is January 31st.
Obamacare premiums for 2026 have skyrocketed as insurers expect some enrollees to drop out of the market, in part because of uncertainty over the extension of expanded premium tax credits.
Oscar Health has worked with insurance brokers to inform its members about cheaper rates.
“We believed we could sell 85% of the people affected by the increased subsidies. And what we’re seeing now may say more,” Bertolini said.
KFF executive vice president for health policy Larry Levitt said participants should consider enrolling by Dec. 15 even if Congress fails to pass premium relief before the end of the year because the Trump administration has tightened rules for enrolling outside of open enrollment.
“The premiums are still month-to-month, so you’re committing to a monthly premium. If it’s unaffordable, you can get out at any time, but you can’t get back in if you don’t sign up,” Levitt said.
