White House Floats Two-Year ACA Subsidy Extension as Deadline Looms

The White House is circulating a draft proposal that would extend Affordable Care Act subsidies for another two years, offering temporary relief as millions of Americans brace for a sharp jump in health care costs when current tax credits expire at year’s end.

According to The Associated Press, the plan suggests President 👤Donald Trump is open to preserving a key part of 🏥Obamacare while his administration and congressional Republicans continue searching for a broader health care overhaul.

Officials emphasized that nothing is final until the president announces it himself.

The subsidies were central to the recent government shutdown standoff. Most Democrats demanded a straight extension of the pandemic-era tax credits as a condition for keeping the government open.

Those credits, expanded during COVID-19 to help families afford coverage, are set to lapse soon.

According to two people familiar with the draft, eligibility for the subsidies would be capped at 700% of the federal poverty level.

Before the pandemic, the Affordable Care Act capped eligibility at 400%, but that limit was suspended temporarily, allowing many middle- and higher-income Americans to receive help.

The new plan would also require all enrollees to pay at least some premium, ending the availability of zero-premium plans for lower-income households.

One option under consideration would require everyone to pay 2% of their income — or at least $5 monthly — for lower-tier plans. Republicans have argued that no-cost plans have enabled fraud, and the White House appears open to tightening those rules.

Still, any move to extend part of former President Barack Obama’s signature law is expected to draw pushback from conservatives who have sought to repeal it for more than a decade.

“Until President Trump makes an announcement himself, any reporting about the administration’s health care positions is mere speculation,” White House spokesman Kush Desai said Monday.

Press secretary Karoline Leavitt added that Trump “is very much involved in these talks” and focused on a proposal “that will fix the system and will bring down costs for consumers.”

Some Democrats signaled early openness to the idea. Sen. Maggie Hassan of New Hampshire said the draft “represents a starting point for serious negotiations,” adding that Trump’s willingness to consider an extension shows broad recognition of the stakes.

Sen. Jeanne Shaheen, who helped broker a bipartisan end to the shutdown, echoed that sentiment.

“They understand that the vast majority of people who benefit from these tax credits live in states the President won,” she said, arguing that Republicans now face clear political pressure to act.

The Republican Party has struggled for years to coalesce around a unified health care plan. In 2017, Trump fell short in an effort to dismantle the Affordable Care Act outright, a setback that has shaped the GOP’s health care debates ever since.

As the White House refines its proposal — led by the Domestic Policy Council — Senate Republicans are advancing their own ideas.

Sens. Rick Scott and Bill Cassidy are among those pitching plans to redirect subsidy spending into health savings accounts that consumers could use to purchase coverage or offset out-of-pocket costs.

Scott’s proposal, released Thursday, has already been discussed with the White House multiple times, according to a person familiar with the conversations.

The administration’s draft would also allow lower-tier enrollees — such as those in bronze or catastrophic plans — to contribute to health savings accounts. It further proposes codifying the “program integrity rule,” aimed at rooting out fraud, waste, and abuse.

Meanwhile, Americans shopping for 2025 coverage have already experienced steep price hikes. Without congressional action, average subsidized enrollees will face more than double their current premiums next year, according to nonprofit health research group KFF.

The spikes come amid broader concerns about rising costs, an issue that dominated this month’s elections — and helped propel Democrats who focused heavily on affordability.