What a deal on exchange plan subsidies might look like

Modern Healthcare – Monday, October 13, 2025
By Michael McAuliff

Congress remains far from a deal to reopen the government but some rank-and-file members have begun to discuss what an extension of the expiring tax credits in health insurance exchange plans could look like.

To be sure, the prospects of any deal or negotiation are slim at the moment. Most Senate Democrats and one Republican have voted seven times against a Republican bill to fund the government through Nov. 21. A Democratic alternative, which would fund the government through October, extend enhanced tax credits under the Affordable Care Act that expire this year and repeal Medicaid cuts, has only won Democratic support.

Republicans in the House and Senate maintain they only will negotiate with Democrats after Democrats vote for the Republicans’ stopgap bill, known as a continuing resolution.

That doesn’t mean lawmakers haven’t been talking to each other informally. Republicans asked about what might be included in any talks pointed to several areas, including reducing the credits, lowering the income caps to receive them, instituting tighter controls on fraud and eligibility and considering whether insurance companies should carry a larger share of costs.

Two of the loudest GOP proponents of some sort of extension of the credits, which were boosted by Democrats amid the COVID-19 pandemic and run out Dec. 31, are Sens. Josh Hawley (R-Mo.) and Thom Tillis (R-N.C.).

Both have said repeatedly they don’t want to see the enhanced credits go away. Doing so would raise exchange plans’ insurance premiums by an average of 114%, according to KFF and cause some 4 million people to lose insurance, according to the Congressional Budget Office.

“I’m talking to Democrats about what we can do on the premium side,” Hawley told reporters, although he didn’t elaborate and insisted Democrats had to relent on the shutdown first. “This is really up to them about when they decide they want to reopen the government.”

Tillis said there are plenty of Republicans willing to talk to Democrats, but the federal government’s shutdown brought those conversations to a halt.

“They should have waited to see, and negotiate in good faith with people like me that want to get to a good landing place, people like Marjorie Taylor Green, people like Lisa Murkowski, a pretty broad spectrum, that all agree that we need to do something,” Tillis said, referring to the conservative Georgia congresswoman and the moderate Maine senator.

Most elected Republicans, however, still don’t like “Obamacare,” as the Affordable Care Act is often called, and would likely demand substantial concessions for keeping the more generous subsidies.

Republicans often pointed to fraud as something that needed to be addressed, referring both to disputed claims by conservative groups about enrollment and more commonly accepted concerns about overly aggressive brokers.

“During Covid, it got spiked out of control,” said Sen. Shelley Moore Capito (R-W.Va.). “I mean, we need look for reforms, and I think that’s what you’re going to see in there.”

Sen. Tommy Tuberville (R-Ala.) said some Republicans were hashing out ideas with Centers for Medicare and Medicaid Services Administrator Dr. Mehmet Oz, who became a popular sounding board for Republicans during passage of the Medicaid cuts in the recent tax-cut law.

“They’re coming up with a solution of getting people off the rolls and shouldn’t be on there,”said Tuberville, adding that the role of insurance companies was a topic of discussion.

Sens. Susan Collins (R-Maine) and Jeanne Shaheen (D-N.H.) largely have been leading internal talks, with Collins telling reporters she has selectively circulated a discussion draft to extend the subsidies.

She told a local newspaper that “a cap” on income would be a key element.

Sen. Dr. Roger Marshall (R-Kan.), who does not support the ACA, said that after addressing fraud, a key element for him would be ending “silver loading,” which refers to insurance companies’ practice of raising the prices of the benchmark marketplace plans that are used to determine subsidies. The higher-priced benchmarks raise subsidies across the board.

He had a hard time envisioning House Republicans getting on board with any extension. “I don’t know if the House could ever pass it,” Marshall said.

Many Republicans simply want the boosted subsidies to go away. Sen. Jim Justice (R-W.Va.) said he would find a short extension acceptable, perhaps for six months, even if it’s a painful loss for constituents.

“It’s tough when that happens. So, I truly understand that people will hurt to some degree, but we’re trying to reward, to make up for the hurt,” Justice said, referring to the tax cuts that were recently extended.

Other Republicans thought there might be negotiations, but that a complete overhaul of the ACA would be needed.

Democratic leaders have been cool to the idea of informal suggestions or promises of some sort of vote immediately after Democrats agree to a Republican stopgap funding bill. House Minority Leader Hakeem Jeffries declined Friday in a news conference to embrace the idea of setting a specific date for a vote.

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