With just weeks before enhanced Affordable Care Act subsidies expire for 22 million Americans, Congress faces mounting pressure to act on healthcare funding. We’ll talk about the negotiations unfolding on Capitol Hill, what we’re hearing from the White House and how the issue could shape the 2026 midterm elections.
Guests:
Larry Levitt, executive vice president for health policy, KFF - a nonpartisan health policy research, polling and news organization
Sam Liccardo, United States Representative, California's 16th Congressional District - includes Santa Clara and San Mateo counties
Jonathan Cohn, senior national correspondent, The Bulwark; author, "The Ten Year War: Obamacare and the Unfinished Crusade for Universal Coverage"
This partial transcript was computer-generated. While our team has reviewed it, there may be errors.
Guy Marzorati: This is Forum. I’m Guy Marzorati in for Mina Kim. In less than a month, enhanced Obamacare tax credits will expire. These subsidies are used by roughly twenty-two million Americans who purchase health care on the Affordable Care Act marketplaces like Covered California. The result, according to one estimate, is that health care premiums will more than double on average. There’s lots of agreement in Washington that this is a big deal. Here’s Missouri senator Josh Hawley at a Senate hearing yesterday.
Sen. Josh Hawley (clip): If we don’t do something on this issue — if Congress does not take action on this issue in the next few weeks — this will be a crisis for twenty-four million Americans and counting.
Guy Marzorati: But what to do about the looming expiration of these health care tax credits? There seems to be less agreement about that. Joining us to discuss the latest, Jonathan Cohn, senior national correspondent with The Bulwark. He’s also the author of a book about the Affordable Care Act called The Ten Year War: Obamacare and the Unfinished Crusade for Universal Coverage. Jonathan, thanks for joining us.
Jonathan Cohn: Thank you for having me.
Guy Marzorati: And Larry Levitt, executive vice president for health policy at KFF, a nonpartisan health policy research, polling, and news organization. Larry, thanks for joining us.
Larry Levitt: Yeah, thanks for having me.
Guy Marzorati: And, Larry, maybe I’ll start with you. If you could remind us how these Obamacare subsidies work and what would happen at the end of the month if these tax credits expire.
Larry Levitt: The Affordable Care Act, when it was originally passed, included subsidies to help people buy insurance. These come in the form of refundable tax credits. There was criticism of the ACA from the start — valid criticism — that even with these tax credits, coverage still wasn’t affordable for many people. So in 2021, when Democrats took charge of Congress and the White House, they enhanced the tax credits — increased the credits people get and extended them to more people.
The way these tax credits work is: people are expected to pay a certain percentage of their income toward health insurance, and the tax credit covers the rest. With the enhanced credits, that ranges from nothing for very low-income people to eight and a half percent of income for middle-income people with incomes above four times the poverty level, which is about sixty-three thousand dollars for a single person.
Guy Marzorati: And so the subsidies are potentially going away. At the same time, I’m seeing that the underlying prices of these premiums for marketplace plans are going up. Why is that also happening?
Larry Levitt: That’s right. The average increase for Affordable Care Act plans — what insurers are charging — is going up by twenty-six percent on average, which is a lot. Some of that is simply because health care costs are going up. Hospital prices are rising. Drug prices are rising. More people are using drugs like GLP-1s for weight loss. All of that pushes health care costs up, which pushes premiums up.
But there’s something unique going on in the Affordable Care Act marketplace: insurers are expecting these enhanced tax credits to expire after this year and that Congress won’t extend them. They expect healthier people will drop out of the market, leaving sicker people with insurance, which means costs will be higher.
But it’s important to differentiate between what insurers are charging and what people pay. As you said, what people will have to pay will more than double on average if these tax credits go away.
Guy Marzorati: Right — based on whether these subsidies expire or not. And, Jonathan, what’s the latest on Capitol Hill as we barrel toward this deadline?
Jonathan Cohn: Well, the latest on Capitol Hill could change from the beginning of my answer to the end of my answer. This is in total flux. Democrats know they want to extend the subsidies. They’d like to extend them indefinitely. They’ve made clear they’ll settle for a year or two or three. I think the offer they’re making now is three years, but it’s pretty clear they’d be okay with a shorter extension just to buy some time.
Republicans are all over the place. You played Josh Hawley before — there are a number of Republicans who feel strongly that they don’t like government-run health care plans and they certainly don’t like Obamacare. But these are their constituents. In fact, they’re disproportionately in red districts and red states. So they’re also interested in extending these subsidies, probably with some modifications because they have various concerns.
But you also have the other end of the spectrum — Republicans who will never vote for this. Not a chance in the world. This goes against their beliefs about what government should be doing. And again, this is Obamacare, which many have spent their political careers trying to repeal. The only thing they’ll talk about is that any extension of this money would have to involve major changes to the law that adhere to conservative principles — which generally means fewer rules protecting people with preexisting conditions. That does make insurance cheaper, but also makes it harder to get and less useful for people with serious medical conditions.
They’re late to debating this. The debate has only really started in the last few weeks, even though everyone knew this was coming. Republicans haven’t figured out what they want yet. And a lot of them will look to President Trump for guidance, but he’s been all over the place — on social media, in gaggles on Air Force One. One minute he says, “I hate Obamacare, it stinks, we have to blow it up, I’d never do anything to help it.” The next minute he’s like, “Well, maybe we need to do something about these subsidies because people are gonna be hurting — but only with changes.”
So it’s hard to imagine real negotiations until Republicans figure out what they want as a party, or unless enough Republicans are willing to break with their party and work with Democrats. Then something could happen.
Guy Marzorati: Yeah. And on the Democratic side, this was the focal point of the fall’s government shutdown, right?
Jonathan Cohn: It was. This was their key demand — the thing they put front and center. Democrats aren’t united on a lot of things, but on this they are. Health care is an issue for Democrats — it’s in their bones, it’s in their DNA. It’s been a cause for the party since Harry Truman. This was their demand. That’s why they shut down the government.
In the end, they didn’t get their demand. They did get a vote, which we’re supposed to get next week in the Senate, at least. The House has not promised a vote. The Senate majority leader did promise a floor vote on a Democratic proposal. At this moment, the assumption is Democrats will put forward a two- or three-year extension — and it will get voted down. It won’t have the votes to pass.
Guy Marzorati: And what have we heard — you mentioned President Trump kind of moving around on this — what have we heard from Republican leadership in both the Senate and the House?
Jonathan Cohn: It’s been a little different. In the Senate, Senator Thune has been more — reading between the lines — open to the idea that there’s a conversation to be had about putting together a bill that could pass. But he’s got a divided caucus, so that’s one conversation.
Speaker Johnson has been very vocally against even having a vote on this — any kind of extension. That probably reflects conservatives in his caucus who feel strongly about it.
There was a moment — again, the president has been all over the place — when there were reports the White House was going to propose a compromise. The terms leaked, and it was a real, concrete proposal. You could see the outlines of a negotiation that might lead to a deal. And one of the most remarkable things that happened was huge blowback from House conservatives. Speaker Johnson reportedly called President Trump saying, “No, no, no — we don’t want to do this.” So at this point, whether for his own beliefs or those of his caucus, he is a big obstacle to getting something moving.
Guy Marzorati: And, Larry, I know KFF has a new survey out today on the political fallout if these tax credits are not extended. What did you all find?
Larry Levitt: This was a survey of ACA marketplace enrollees — the twenty-four million people who get coverage through the Affordable Care Act. It looked at both the political fallout and the real-life fallout if these enhanced tax credits aren’t extended.
For example, about a third of ACA enrollees said they would be very likely to shop for a cheaper plan. That cheaper plan would likely be what’s known as a bronze plan — cheaper premiums but deductibles of more than seven thousand dollars per person. And about a quarter said they would be very likely to go without insurance entirely. That’s consistent with Congressional Budget Office estimates. They estimate almost four million people would end up uninsured without the enhanced tax credits.
We also looked at whether people want the tax credits extended. Not surprisingly, ACA enrollees want them extended — and who they would blame if they aren’t. Democrats would blame Republicans; Republicans would blame Democrats. But even many Republicans said they would blame President Trump and Republicans in Congress if the credits aren’t extended.
Guy Marzorati: So that’s how the blame pie would get divided. And, Jonathan, you mentioned that underlying all of this, health care is one of the few really good issues for Democrats generally, right?
Jonathan Cohn: It is. Health care is to Democrats what crime and immigration are to Republicans. And that’s important in the politics of this. These debates get complicated — dollar figures, percentages, competing proposals. People tune out and fall back on their preconceptions. Even when Democrats are unpopular, people trust Democrats on health care.
And on top of that, this shutdown and this whole debate have been one giant advertisement: Democrats want to extend this; Republicans do not. In that environment, if people see their premiums go up, their instinct will be to blame Republicans.
Guy Marzorati: Yeah — especially because this is going to hit right away. These expired tax credits take effect immediately. That was Jonathan Cohn, senior national correspondent with The Bulwark. He’s also the author of The Ten Year War, Obamacare and the Unfinished Crusade for Universal Coverage. Jonathan, thanks so much for joining us this morning.
Jonathan Cohn: Thank you.
Guy Marzorati: And as our conversation continues, we want to hear from you. Do you receive health insurance through an ACA marketplace like Covered California? How are you planning for the future? What would make health insurance more affordable for you? What are your concerns? What are your hopes about the current negotiations in Congress? And how important is health care to your vote next year in the midterm elections?
You can email your comments and questions to forum@kqed.org. You can find us on social channels at kqedforum, or give us a call: 866-733-6786. Stay with us.