As discussed in prior Health Capital Topics articles, the record-long federal government shutdown that began October 1, 2025 was resolved on November 12, 2025, in part through a commitment by Senate Majority Leader John Thune (R-SD) to hold a December vote on legislation addressing the enhanced Affordable Care Act (ACA) premium tax credits set to expire on December 31, 2025.¹That promise has now come due, yet the fate of the subsidies remains uncertain. This Health Capital Topics article provides an update on the ACA subsidy extension saga and the outlook for a resolution before the year-end deadline.

Background

The enhanced premium tax credits were enacted in 2021 as part of the American Rescue Plan Act (ARPA), a COVID-19 pandemic relief measure, and were subsequently extended through 2025 via the Inflation Reduction Act of 2022.² The enhanced subsidies increased the financial assistance available to existing ACA marketplace enrollees and expanded eligibility to Americans earning over 400% of the federal poverty level (FPL) – approximately $62,600 for an individual or $128,600 for a family of four in 2025³ – who were previously ineligible for premium tax credits.⁴ The enhanced credits also capped out-of-pocket premium payments at 8.5% of household income; they were originally capped at 9.5%.⁵

The Kaiser Family Foundation (KFF) estimates that approximately 22 million of the 24 million total ACA marketplace enrollees received a premium tax credit in 2025.⁶ If the enhanced credits expire, subsidized enrollees would see their annual premium payments more than double, from $888 in 2025 to $1,904 in 2026.⁷ Households with incomes just over the 400% FPL threshold are particularly vulnerable, as they would lose eligibility for premium tax credits entirely and face full, unsubsidized premiums. For example, “[o]n average, a 60-year-old couple making $85,000 (or 402% FPL) would see yearly premium payments rise by over $22,600 in 2026.”⁸ The Congressional Budget Office (CBO) has estimated that approximately 2.2 million additional Americans would become uninsured in 2026 if the enhanced subsidies expire.⁹

December 2025 Update

On December 11, 2025, the Senate voted on two competing healthcare proposals, both of which failed to achieve the 60 votes necessary to overcome the filibuster threshold.¹⁰ Democrats proposed a three-year extension of the enhanced ACA subsidies, which failed by a vote of 51-48.¹¹ The Republican alternative, which also failed 51-48, would have paid Americans earning less than 700% of FPL up to $1,500 annually in health savings account (HSA) payments, but would not have extended the ACA premium tax credits.¹² Democrats opposed the measure, arguing it did not address health insurance premiums and objected to provisions restricting abortion and gender-affirming care.¹³

Following the Senate’s failure to advance either proposal, House Speaker Mike Johnson (R-LA) unveiled a healthcare package on December 12, 2025, titled the Lower Health Care Premiums for All Americans Act.¹⁴ The House bill does not include an extension of the enhanced ACA subsidies but instead comprises several alternative Republican health policy priorities, including:

1. Expanding the availability of association health plans, which allow small businesses and self-employed individuals to assemble to purchase coverage;
2. Imposing new transparency requirements on pharmacy benefit managers (PBMs) to lower drug costs; and
3. Restoring federal funding for ACA cost-sharing reduction (CSR) payments, which would provide funds to insurers to reduce deductibles and out-of-pocket costs for lower-income ACA marketplace enrollees, though it would not directly address rising premium costs.¹⁵ The Trump Administration halted CSR payments during the first Trump term, prompting insurers to adopt “silver loading,” i.e., raising silver plan premiums to offset the lost payments, which paradoxically increased federal spending on premium subsidies.¹⁶

House Republican leaders have indicated they expect to allow an amendment vote on extending the ACA subsidies, though the specific parameters of such an amendment are still being negotiated. The House is scheduled to vote on the healthcare package this week, during its final legislative session of 2025.

Bipartisan Discharge Petitions

On December 17, 2025, a faction of moderate Republicans, primarily from swing districts, broke with party leadership by endorsing bipartisan discharge petitions, a procedural mechanism that could force a floor vote on subsidy extension legislation without committee approval if 218 signatures are obtained.¹⁷ Four House Republicans signed on to the petition filed by House Minority Leader Hakeem Jeffries (D-NY) for a clean three-year extension of the ACA subsidies, pushing the petition, which had attracted 214 Democratic signatures but no Republican support, over the required threshold.¹⁸

However, this proposal will not be brought to a vote in the House until January 2026, after the subsidies expire.¹⁹ Even if the proposal is passed, it is likely to not move forward in the Senate, where Republicans blocked a three-year extension a week prior.²⁰

White House Position

The White House circulated a draft healthcare proposal in late November 2025 that would have extended the enhanced ACA subsidies for two years while imposing new eligibility restrictions, including capping eligibility at 700% of FPL and requiring all ACA marketplace enrollees to pay some premium amount—effectively eliminating zero-premium plans.²¹ However, the proposal was never formally released and has stalled amid divisions within the Republican Party over whether to extend, modify, or eliminate the subsidies entirely.

President Donald Trump has repeatedly expressed preference for redirecting federal healthcare funds directly to individuals rather than extending subsidies paid to insurers.²² Healthcare policy analysts have previously raised concerns about the feasibility of such an approach, noting that direct payments might not be used to purchase insurance coverage and could destabilize the ACA risk pool.²³

Outlook

With Congress’s holiday recess set to begin on December 20, the prospects for legislative action before the December 31, 2025 deadline appear dim.²⁴ Even if the House were to pass healthcare legislation this week, the Senate is not expected to vote on any additional proposals before adjourning for 2025.²⁵

Nevertheless, the timeline has already passed for many ACA marketplace enrollees who needed to meet the December 15, 2025, deadline to ensure their exchange plan coverage began on January 1, 2026.²⁶ A November 2025 survey of ACA marketplace enrollees found that 25% of respondents indicated they would be “very likely” to go uninsured if their monthly premium doubled, with that figure rising to 28% among enrollees in states with Republican governors.²⁷ Some market analysts have suggested that ACA-related legislation may ultimately pass in late January 2026 after the subsidies have already lapsed,²⁸ potentially triggering a special enrollment period to allow consumers to adjust their coverage selections.

Healthcare Provider Implications

The Urban Institute has estimated that expiration of the enhanced premium tax credits would increase uncompensated care in the U.S. by approximately $7.7 billion, a 12% increase over the $66.7 billion baseline.²⁹ The additional uncompensated care burden would be absorbed by several different types of providers, with approximately $2.2 billion by hospitals, $1.0 billion by physician offices, $3.1 billion by other services, and $1.5 billion by prescription drug manufacturers/providers.³⁰ Non-Medicaid expansion states would experience disproportionately higher increases in uncompensated care.³¹

Whether Congress will ultimately extend the enhanced premium tax credits (and under what terms) remains to be seen. Health Capital Topics will continue to monitor these legislative developments and provide updates as events unfold.