Lawmakers in the U.S. Senate are showing renewed interest in negotiating the future of enhanced Affordable Care Act (Obamacare) subsidies, but deep divisions remain over how to prevent a sharp rise in health insurance premiums once the current support expires at the end of the year.
During a recent hearing of the Senate Health, Education, Labor and Pensions Committee, senators discussed the looming affordability crisis facing millions of Americans. Without congressional action, more than 24 million people could see their insurance costs surge.
“This will become a national crisis if lawmakers fail to act,” warned Josh Hawley. Despite that warning, Hawley introduced a sweeping alternative proposal of his own — a bill that would allow Americans to deduct up to $25,000 in medical expenses from their taxes. His move underscored how many Republicans remain reluctant to simply extend the existing subsidies favored by Democrats.
GOP Leadership Pushes for Broader Health Policy Changes
Committee Chair Bill Cassidy opened the hearing by stressing the urgency of finding a solution within the next three weeks, before the subsidies begin to phase down. Cassidy said larger structural reforms could be debated in the new year but urged lawmakers to reach immediate common ground.
“We need to land on something everyone can live with,” Cassidy said, noting that he has begun bipartisan talks with Josh Gottheimer to explore a cross-chamber agreement.
However, sharp disagreements quickly surfaced during a heated exchange between Cassidy and the committee’s ranking Democrat, Bernie Sanders. Sanders pressed for a straightforward extension of the enhanced subsidies, arguing that millions would otherwise lose affordable coverage.
Cassidy pushed back, saying the underlying problem lies in high deductibles and out-of-pocket costs under Obamacare plans. Drawing from his experience as a physician, he said deductibles of $6,000 or more discourage patients from seeking care even when they technically have insurance.
Competing Visions for Fixing the System
Cassidy has proposed transforming current subsidy funding into government-supported health savings accounts (HSAs) that consumers could use to offset costs under bronze-tier insurance plans. These plans typically have lower monthly premiums but much higher deductibles.
Sanders strongly criticized the approach, saying it would not guarantee universal access to health insurance and could leave many Americans still underinsured.
Some senators suggested a temporary extension of the subsidies as a stopgap measure to avoid immediate premium shocks while negotiations continue.
“We’ll likely need a short-term solution with reasonable income limits,” said Lisa Murkowski.
Political Outlook Remains Uncertain
Meanwhile, Senate Majority Leader John Thune has promised Democrats a vote next week on extending the subsidies. However, with strong Republican opposition, the measure is widely expected to fail.
It remains unclear whether lawmakers will move forward with a bipartisan compromise package, a Republican alternative, or allow the enhanced subsidies to lapse — a move that would result in significant premium increases for millions of Americans starting next year.
