Healthcare Policy Update: End-of-Year Outlook on ACA Subsidies and 2026 Coverage Landscape
As Congress prepares to adjourn for the holidays, end-of-year negotiations over Affordable Care Act (ACA) premium subsidies have stalled, making a lapse on January 1, 2026 increasingly likely. Despite a flurry of bipartisan activity in both chambers, lawmakers now concede that no legislative fix will be enacted before the credits expire, setting up a politically consequential start to the new year for millions of Americans who rely on the subsidies for affordable coverage. Below is Constitution Partner’s assessment of where things stand, and what to expect in 2026.
Senate Efforts Fall Short as Bipartisan Talks Continue Into 2026
A bipartisan group of senators led by Sen. Susan Collins (R-ME) and Sen. Bernie Moreno (R-OH) has been attempting to break the stalemate over extending the Covid-era ACA subsidies. Collins has indicated a vote could occur early next year, potentially paired with a new or extended open enrollment period to mitigate the immediate premium shock for consumers.
The group met again this week and committed to finalizing a proposal, but members acknowledged that time has run out to pass legislation before the Dec. 31 deadline. Collins emphasized preventing “huge spikes in insurance premiums that will make insurance unaffordable for lower- and middle-income Americans,” a message especially resonant as she heads into a competitive re-election fight.
The draft bipartisan framework under discussion includes:
● A two-year extension of ACA premium subsidies
● Potential income caps for eligibility (e.g., excluding households earning over $200,000)
● Measures to reduce fraud and address underlying health care costs rather than only subsidizing premiums
● Any proposal, however, will need to navigate a Democratic caucus that previously shut down the government for more than a month to secure a clean extension of the subsidies
In a symbolic move late last week, the Senate rejected two competing approaches to the looming subsidy cliff:
● A three-year extension backed by Democrats and four Republicans (Collins, Sullivan, Murkowski, Hawley) failed to meet the 60-vote filibuster threshold
● A Republican alternative replacing subsidies with federally funded, tax-advantaged Health Savings Accounts (HSAs) failed 51–48
The bipartisan failure cements that no solution will be passed before the end of 2025.
House Moderates Push for Action
Speaker Johnson announced Tuesday the 16th that he would not schedule a vote on extending the ACA health subsidies before the end of the year. Johnson said an agreement didn’t emerge during talks over the weekend. “Many of them did want a vote on this Obamacare, Covid-era subsidy the Democrats created,” he said. “We looked for a way to try to allow for that pressure release valve, and it was just not to be.”
House Majority Leader Steve Scalise (R-LA) said there was back and forth over the issue but ““Ultimately, the decision was made not to go forward in Rules Committee, but there was a lot of discussion about that,” he said.
Moderate Republicans have attempted to force legislative action through discharge petitions, and Rep. Brian Fitzpatrick (R-PA) has proposed a two-year extension with income limits. But under House rules, petitions require a seven-day period after reaching 218 signatures before a vote, making action before recess virtually impossible without intervention from Speaker Mike Johnson, who remains firmly opposed to extending the current subsidy structure.
The announcement makes certain that Covid-era enhanced credits will end after Dec. 31. Senators want negotiations to continue into the new year, but they’ll face even more barriers to an agreement after the subsidies lapse.
Premium Shock Expected January 1 Without Congressional Action
What to Expect if Subsidies Lapse:
● Average monthly premiums could increase from $888 to $1,904
● Roughly 4 million Americans could lose coverage over the next decade
● Out-of-pocket costs for many households could double or more during 2026 open enrollment
What to Expect in Early 2026
● Renewed Bipartisan Negotiations
A bipartisan Senate group is expected to formally unveil a proposal in early January. This could form the basis of broader negotiations, especially if premium increases trigger political pressure.
● Possible Extension of Open Enrollment
If Congress signals that a subsidy deal is forthcoming, CMS may consider reopening or extending the open enrollment window to allow consumers to adjust their coverage decisions.