Congress delays action on ACA enhanced premium tax credits

Enhanced premium tax credits (EPTCs) for coverage under the Affordable Care Act (ACA) will lapse on December 31, 2025, after Congress recessed for the year without approving an extension. The issue is expected to remain under discussion after Congress returns to session in January.

Senate votes on EPTC extension and alternative proposal fall short of required votes

As part of the legislative deal that ended the government shutdown in November, Senate Majority Leader John Thune agreed that the Senate would vote on legislation to extend the EPTCs. During the weeks after the government shutdown ended, lawmakers from both parties introduced bills to extend the EPTCs; extend the EPTCs with modifications, such as restrictions on eligibility; and establish alternative programs, such as assistance through health savings accounts (HSAs).

On December 11, the Senate voted on proposals to extend the EPTCs and a proposal to establish an HSA-style alternative.

• The Lower Health Care Costs Act (S.3385) sponsored by Senate Minority Leader Chuck Schumer (D-NY) would extend the EPTCs for three years.
• The Health Care Freedom for Patients Act (S.3386) would provide temporary contributions to HSA-style accounts for eligible individuals. It would also fund ACA cost-sharing reductions, expand eligibility for ACA catastrophic plans and make other changes.

Neither bill received the 60 votes necessary to ensure Senate approval. In the days following the Senate vote, some lawmakers continued discussions on provisions that could achieve the 60 votes needed to ensure approval.

House approves bill without EPTC extension

House leaders had not promised a vote on extending the EPTCs. Instead, they moved forward on legislation that does not extend the EPTCs. On December 17, the House approved the Lower Health Care Premiums for All Americans Act (H.R.6703). It would:

• Authorize association health plans
• Amend ERISA to ensure stop loss coverage is not considered health coverage and preempt state laws prohibiting group health plans from purchasing stop loss coverage
• Require pharmacy benefit managers to disclose information to health plan sponsors
• Codify the rules authorizing individual coverage health reimbursement arrangements
• Fund the ACA’s cost-sharing reductions

House members from both parties urged a vote on extending the EPTCs and attempted to vote on amendments that would add an extension to the Lower Health Care Premiums for All Americans Act. When those efforts were unsuccessful, several Republican lawmakers signed a petition to require the House to vote on a three-year extension. Those signatures provided the 218 signatures necessary to force a vote. The House will be required to vote on a three-year extension after Congress returns to session in January.

The House petition ensures that discussions to extend the EPTCs will continue in January, but the outlook for final action remains unclear.