Congress races to address expiring ACA tax credits as deadline nears

Congress races to address expiring ACA tax credits as deadline nears

Washington, November 16, 2025


WASHINGTON —  Lawmakers on Capitol Hill are racing to reach an agreement on the future of Affordable Care Act tax credits set to expire at the end of the year, a lapse that could cause health insurance costs to spike for millions of Americans.

The enhanced premium tax credits, first created under the 2021 American Rescue Plan, significantly reduce monthly insurance costs for low- and middle-income households. The credits are set to end on Dec. 31 unless Congress acts.

 
The issue emerged as one of the major conflicts between Democrats and Republicans during negotiations to end the nation’s longest-ever government shutdown. Congress ultimately passed legislation to reopen the government without extending the ACA subsidies, prompting new urgency on the Hill.

Rep. James Walkinshaw (D-Va.) said Congress has already run out of time to draft a replacement and should move immediately to extend the existing tax credits.

“It is urgent and needs to be addressed immediately,” Walkinshaw said. “Folks are logging in now, signing up for their insurance next year, and they’re seeing the premiums doubling or skyrocketing.”

Walkinshaw voted against the bill to reopen the government because it did not include the subsidy extension. He warned that “each day that passes, that damage gets worse and worse.”

Some Republicans say they are willing to extend the ACA subsidies, but only if Congress adds reforms.

President Donald Trump has argued that federal spending should shift away from insurers and toward untaxed Health Savings Accounts, which consumers can use to pay for care directly.

Sen. Bill Cassidy (R-La.), who chairs the Senate Health Committee, said he wants a new system that channels more financial support straight to patients.

“If we can have lower premiums and help people with their deductibles by giving the money directly to the patient—why don’t we unite Republicans and Democrats in doing that?” Cassidy said.

Cassidy has pushed for a broader redesign of the insurance marketplace, saying, “We need a new model—one that engages the patient in her own health care.”

Walkinshaw countered that Republicans missed their chance to propose major changes earlier in the year.

“If Republicans were interested in making dramatic changes, they should have started earlier,” he said. “At this point, there isn’t enough time.”

Senate leaders say they are aiming to bring the issue to a vote by mid-December. But as of this week, no final deal has been announced.

If the enhanced credits expire, analysts say millions of households could see substantial increases in their 2026 health insurance premiums.