Uncertainty Follows Senate's Rejection of Competing Healthcare Proposals

After months of effort by lawmakers and advocacy groups to prevent the expiration of the Affordable Care Act (ACA) tax credits for at least 20 million Americans on January 1, the Senate voted on Thursday to reject a bill that would have extended them. Simultaneously, the Republican-proposed bill to redirect funds into health savings accounts (HSAs) for individuals buying bronze or "catastrophic" plans on the ACA exchanges was also rejected.

“GOP leaders in the House are signaling a potential vote in coming days on legislation to address healthcare costs, but the party has yet to coalesce behind a plan,” NPR’s Saige Miller reported. Senate Health Committee Chairman Bill Cassidy told ABC News that Republicans are considering a "hybrid approach" to address Democrats' request for a temporary extension of ACA subsidies, if it would help lower patients' deductibles.

Meanwhile, uncertainty persists as open enrollment and 2026 plan pricing continue to unfold.

Josh Schultz, Head of Government Affairs at the healthcare technology company Softheon, and an ACA marketplace expert, discusses with Healthcare Innovation what could be next.

With the recent Senate vote not to extend the tax credits, how will this affect the ACA exchange and individuals heading into 2026?

The immediate effect of the Senate vote is that the enhanced premium tax credits remain scheduled to expire at the end of 2025. If Congress does not act before then, many Marketplace enrollees will face significantly higher net premiums in 2026. Many households would see their monthly payments – based on net premium – double or more, particularly middle-income enrollees who benefited most from the temporary subsidy expansion. As premiums rise, some healthier individuals are likely to drop coverage, which could further deteriorate the risk pool and put upward pressure on premiums across the Exchanges.

The Republicans’ HSA replacement bill was also rejected. What does that mean?

The rejection of the Republican HSA-based proposal means Congress failed to coalesce around either extending the enhanced ACA subsidies or replacing them with an alternative support mechanism. The GOP bill was structured as a substitute for enhanced premium assistance, not a continuation of it, and would have temporarily shifted support toward flat HSA contributions rather than premium-based subsidies. With both approaches failing to advance, the policy default remains a reversion to pre-2021 ACA subsidy rules in 2026, absent further legislative action.

What are the potential consequences of this vote for care providers?

For providers, the primary impact is likely an increase in uninsurance and underinsurance, leading to higher uncompensated care and bad debt. Hospitals and safety-net providers are particularly exposed, especially in regions where Marketplace enrollment is high. As patients lose coverage or face higher cost-sharing, providers may see delayed care, increased emergency department use, and lower reimbursement rates, all of which strain already tight margins. Some hospital systems may work to launch Provider Sponsored Health Plans (PSHPs) to respond to this new strain on their operating environment.

What alternatives do people have for affording health insurance?

Individuals facing higher Marketplace costs in 2026 will have limited but important options. Many will re-shop plans during open enrollment, moving to lower-cost bronze or narrower-network options. Some may newly qualify for Medicaid or CHIP due to income changes. Employer-sponsored coverage, either through a new job or a spouse, may become the most affordable alternative for some households. In a few states, Basic Health Programs can provide a lower-cost option for near-low-income individuals. Non-ACA plans, such as short-term coverage, may appear cheaper, but they often lack consumer protections and comprehensive benefits, and do not serve as true substitutes for ACA coverage.

What can we expect in the short term and long term?

In the short term, there will be heightened political pressure and uncertainty as open enrollment and 2026 plan pricing proceed without clarity on subsidy policy. Insurers, states, and consumer advocates will continue pushing for last-minute legislative solutions, but operational planning will assume that enhanced subsidies expire. In the long term, if no action is taken, the ACA Marketplaces will likely reset to a smaller, higher-cost equilibrium, with fewer enrollees, higher premiums, and greater financial pressure on providers. Future congressional action could still alter this trajectory, but any delayed fix would come after real coverage decreases and market disruption have already occurred.