On December 11,2025, the Senate rejected competing bills addressing Affordable Care Act (ACA) subsidies, resulting in the expiration of tax credits and the prospect of higher health insurance premiums for many Americans in 2026. Both a Democratic bill intended to extend these subsidies and a Republican proposal involving Health Savings Accounts (HSAs) failed to pass, creating uncertainty regarding healthcare costs. At the start of this process (government shutdown related), I covered the initial policy questions regarding the ACA subsidy extension issue in a post that’s available here: https://rhislop3.com/shutdown-is-over-the-pieces/
Senate Vote Summary: December 2025
Two Healthcare Bills Rejected: The Senate considered and ultimately voted down two separate pieces of legislation aimed at replacing or extending ACA subsidies before their scheduled expiration.
Democratic Bill: Sought to continue ACA tax credits, which would have prevented significant increases in health insurance premiums.
Republican Bill: Focused on establishing HSAs and providing additional tax credits for small businesses; however, it faced criticism for narrowing coverage options and introducing restrictions related to abortion and transgender healthcare.
Outcome: Both bills were unable to secure the required 60 votes, leaving millions of Americans at risk for increased costs.
With a slim majority, Senate Republicans have proposed at least five different plans since early December, combining temporary extensions of subsidies with broader, long-term reforms. The following table provides an overview of these major proposals, based on recent legislative analyses and Senate debates:
| Proposal Name/Author(s) | Core Components | Target Beneficiaries | Projected Impact | Status |
| Health Care Freedom for Patients Act (Sens. Mike Crapo, R-ID, and Bill Cassidy, R-LA) | – Redirects ACA subsidy funds to HSAs for bronze/catastrophic plans. – $1,000 annual HSA deposit for adults 18-49; $1,500 for 50-64 earning <700% federal poverty level (FPL). – Funds CSRs to reduce out-of-pocket costs. – Bans HSA use for abortions or gender transition services. – Requires states to verify citizenship/immigration status for Medicaid. – Reduces federal Medicaid funding to states covering “illegal immigrants.” | Individuals/families on ACA exchanges without employer coverage; up to 700% FPL. | – Lowers 2027 premiums by 11%. – Saves taxpayer money by bypassing insurers. – Critics: Covers only a fraction of high deductibles (~$7,500 average for bronze plans); favors healthier/wealthier enrollees. | Senate vote scheduled for Dec. 11; backed by leadership as the GOP alternative. |
| Two-Year Extension with Reforms (Sens. Bernie Moreno, R-OH, and Susan Collins, R-ME) | – Temporarily extends enhanced ACA tax credits for two years. – Adds income caps and minimum premium payments to curb abuse. – Pairs with HSA expansions for high-deductible plans. | Low- to middle-income ACA enrollees. | – Prevents immediate premium spikes for 22M people. – Estimated cost: Lower than three-year Democratic plan due to restrictions. | Circulating privately; potential compromise but not the leadership pick. |
| HSA Expansion Bill (Sen. Rand Paul, R-KY) | – Expands HSAs to all Americans, not just those with high-deductible plans. – No direct subsidy extension; focuses on tax-free savings for healthcare. – Includes broader deregulation of insurance markets. | All Americans, emphasizing personal responsibility. | – Encourages cost-conscious care; no new spending on subsidies. – Critics: Leaves many without immediate relief from premium hikes. | Released as a standalone; unlikely for Dec. 11 vote but influences broader GOP framework. |
| One Big Beautiful Bill Act (House Republicans, building on summer 2025 law) | – Builds on prior HSA expansions for ACA bronze/catastrophic plans. – Shifts subsidies from insurers to individuals via HSAs. – Deregulates markets (e.g., allows interstate sales, short-term plans). – Adds ideological riders (e.g., defund Planned Parenthood). | Families in high-deductible plans; aims for market competition. | – Reduces premiums long-term via choice; cuts federal spending. – Part of $1.5-2T in proposed cuts over 10 years, including Medicaid reforms. | Influences Senate talks; not a standalone bill but a framework for reconciliation. |
| General GOP Framework (Various, including Sen. Rick Scott, R-FL) | – Massive HSA expansion and individual subsidies. – Medicaid work requirements and fraud reduction. – Price transparency mandates for providers. – Repeal elements of Inflation Reduction Act (IRA) tied to drug pricing. | Vulnerable populations via “responsible” Medicaid; market-driven for others. | – $700B+ in Medicaid savings; lowers costs through competition. – Risks: Potential coverage losses for 16-17M if cuts deepen. | Informal; reflects conservative push in budget talks, not yet voted on. |
These initiatives originate from Republican control of Congress and the White House but encounter significant challenges: The Senate’s 60-vote threshold for advancing most legislation implies that the Crapo-Cassidy proposal was anticipated to fail alongside its Democratic counterpart—serving primarily as a vehicle to articulate GOP priorities. Within the party, conservatives such as Senator Rand Paul advocate for the elimination of subsidies, whereas moderates like Senators Collins and Moreno support brief program extensions. Democrats, under the leadership of Chuck Schumer, have characterized Republican proposals as “junk insurance” that increases patient costs without addressing fundamental affordability concerns. In the longer term, Republicans intend to restructure the ACA via budget reconciliation (thus circumventing the filibuster), potentially incorporating $3 trillion in reductions to Medicaid and Medicare to facilitate tax cuts—a strategy subject to criticism for jeopardizing hospital funding and health coverage for millions. No major House-specific legislation has progressed this week; however, coordination with Senate efforts is anticipated.
An alternative look at the various proposals comes from the Committee for a Responsible Budget. I like this table as it provides some cost estimates to the various proposals.
On Friday of last week, the House released its reform bill option (alternative to what is working through the Senate process). This legislation is called the Lower Healthcare for All Americans Act. The bill’s text is available here. Lower Healthcare for All Americans Act
Central to any of the debates is the extension (or not) of the ACA/Obamacare subsidies. An amendment to the Republican House plan (see above) that came to the floor today (Monday 12/15), was voted down. More here: Amendment to extend ObamaCare subsidies hits roadblock
Key to remember in reviewing any of these proposals is that the U.S. runs a significant deficit so additional funding or even continued funding at current levels will increase the deficit. Some plans, such as Republican plans that give money directly to insureds, generate or increase, inflation. Regardless, all funding will essentially be via new debt issuance, regardless of the amount.