Democrats’ proposal to extend Obamacare subsidies fails in the Senate

A Democratic effort to extend federal health-insurance subsidies failed in the Senate on Thursday, with just weeks to go until millions of Americans covered under the Affordable Care Act face soaring costs for their coverage when the payments lapse.

The Democrats’ proposal would have extended the enhanced Covid-era ACA subsidies for 3 years. Senators voted 51-48 on advancing a GOP health care plan that would have expanded health savings accounts as an alternative to the expiring tax credits.

Democrats’ plan to extend the Covid-era enhanced subsidies for three years also received a 51-48 vote. Both proposals fell well short of the 60 votes needed to vault a key procedural hurdle.

The votes both went largely, but not entirely, along party lines. Sen. Rand Paul of Kentucky was the only Republican to oppose the GOP plan. Meanwhile, Republican Sens. Susan Collins of Maine, Josh Hawley of Missouri, Lisa Murkowski of Alaska and Dan Sullivan of Alaska voted to advance the Democrats’ health care plan.

Paul said his party’s bill, written by Sens. Bill Cassidy of Louisiana and Mike Crapo of Idaho, amounted to “Obamacare lite,” while Collins, Hawley and Murkowski have expressed sharp concerns about allowing the subsidies to expire.

Thursday’s Senate votes were part of a deal Senate Majority Leader John Thune made with Democrats to end the government shutdown that ended last month. Senators have widely acknowledged for weeks that the votes were aimed more at messaging than forcing through passable bipartisan compromise.

Still, a deal in the Senate was likely Congress’ best shot at preventing the subsidies from lapsing and raising premiums for many Americans who buy their insurance directly through Affordable Care Act exchanges.

While the lapse will not completely eliminate the tax credits, they will revert back to pre-pandemic levels and many families could still see their premiums rise by $1,000 a year or more.

The House is similarly riven by partisan divides. Republican leaders have no plans at the moment to put a subsidy extension up for a vote before adjourning for the year next week.

Democratic leaders in the chamber, like Senate Democrats, want to extend the expiring tax credits by three years; two bipartisan bills proposing shorter extensions are subject to discharge petitions that could force action — but not until next year.

Rank-and-file senators are leaving the door open to trying to strike a last-minute bipartisan deal, but they are effectively out of time. The Senate is expected to adjourn next week until January, and, while bipartisan talks are ongoing, they’ve failed to gain momentum. Multiple sticky political fights, including a clash over abortion restrictions, would need to be resolved in a passable deal.