Millions of Americans who rely on the Affordable Care Act (ACA) to keep their health insurance affordable are now bracing for a steep rise in costs as Congress failed, yet again, to reach a deal to extend enhanced tax credits. On December 12, 2025, the Senate rejected two competing bills—one from Democrats aiming to extend the COVID-19-era subsidies, and another from Republicans proposing expanded health savings accounts. Both measures fell short, leaving lawmakers pointing fingers and consumers facing uncertainty as the January 1, 2026 expiration date for the subsidies looms.
The failed votes capped a months-long political drama, including a 43-day government shutdown that Democrats forced in hopes of pressuring Republicans to keep the subsidies alive. According to the Associated Press, Senate Democratic Leader Chuck Schumer made a final plea before the vote, warning, “Let’s avert a disaster... The American people are watching.” He cautioned that if the subsidies weren’t renewed, there wouldn’t be another chance to act before premiums spiked for millions who buy insurance through the ACA marketplaces.
Despite the high stakes, meaningful bipartisan negotiations never materialized. After a group of centrist Democrats struck a deal with Republicans to end the shutdown in exchange for a vote, hopes briefly flickered for a grand compromise. But as Maine Senator Angus King, an independent who caucuses with Democrats, put it, the talks soon stalled when Republicans insisted on adding abortion restrictions—a “red line” for Democrats. “We failed,” admitted Alaska Senator Lisa Murkowski, one of four Republicans who broke ranks to support the Democratic bill. “We’ve got to do better. We can’t just say ‘happy holidays, brace for next year.’”
Republicans, meanwhile, argued their alternative—health savings accounts—would empower consumers by giving them direct control over their health dollars. Senate Majority Leader John Thune called the Democrats’ approach “an attempt to disguise the real impact of Obamacare’s spiraling health care costs.” But Democrats countered that savings accounts wouldn’t be enough to help most families cover rising premiums, and the Republican bill was blocked by a similar 51-48 margin.
With both bills dead, the expiration of enhanced subsidies is now all but certain. That means, as The Hill reports, 22 million people who receive ACA tax credits will see those benefits shrink or disappear, leading to higher monthly payments starting in January. Open enrollment for ACA plans runs through January 15, 2026, but anyone hoping to have coverage begin on January 1 must sign up by December 15. Nearly 5.8 million people have already selected ACA plans in the first 29 days of open enrollment, federal data shows—though experts caution that it’s too soon to draw conclusions about final numbers.
For those facing higher costs, the choices are stark. A recent survey by the Kaiser Family Foundation found that if the subsidies expire, one in three people worried about premium costs would likely choose a plan with lower premiums but higher deductibles and out-of-pocket costs. Even more troubling, one in four said they would likely go uninsured altogether. Insurance experts warn that the real impact may not be felt until later in the year, when some enrollees realize just how expensive their plans have become and drop their coverage.
Senate Democrats wasted no time laying blame at the feet of Republicans. “Senate Republicans just shoved the American people off the side of a cliff with no parachute and with an anchor tied to their feet,” Schumer said on the Senate floor after the vote, as reported by The Hill. He added, “[N]ow the next chapter begins. Republicans will have to answer to the American people … why they chose higher health care costs over real solutions. January 1st is coming. Republicans are responsible for what happens next. This is their crisis now, and they’re going to have to answer for it.”
Republicans, for their part, are feeling the heat. The party is divided between centrists—who warn that failing to extend the subsidies could be political suicide—and conservatives who want the benefits to lapse and the ACA to be overhauled. Some, like North Carolina Senator Thom Tillis, have been pushing for a short-term extension. “Hopefully some ideas emerge before the new year,” Tillis told the Associated Press. He also acknowledged the political risks: “We better be prepared to have a reasonable stump speech if we come up short on extensions.”
House Republicans are now under intense pressure to find a fix. Speaker Mike Johnson has promised a vote next week on a package of health bills, but the proposed measures will not extend the enhanced subsidies. Instead, they focus on cost-sharing reductions and reforms to the pharmacy benefit manager industry—items that have already cleared key committees. Meanwhile, a group of House centrists has launched discharge petitions to force votes on short-term subsidy extensions, but these efforts face long odds and are unlikely to garner broad support from either party.
As lawmakers scramble, the clock is running out. Even if a bipartisan breakthrough comes in January, implementing it would be complicated—and the damage, for many, will have already been done. Some experts say open enrollment would need to be extended, and state and federal exchange employees would have to work overtime to inform people they could re-enroll for better coverage at lower costs—if such a fix ever materializes.
The political fallout is already being felt. Democrats are preparing to make the subsidy expiration a central issue in the 2026 elections, hoping to replicate the success of their 2018 campaign, which centered on Republican efforts to dismantle the ACA. “The Democrats are not going to play ball once we come back. They will not be in a festive holiday mood,” Tillis quipped. “They’re going to be thinking about November of next year and they will find every possible sympathetic case they can.”
Republicans, meanwhile, are struggling to find a cohesive message. “It’s amazing to me that the Democrats can say this is our fault when it’s Obamacare that’s failing. It’s laughable, right? But somehow, they’ve been able to pin it on us,” Senator Markwayne Mullin of Oklahoma told The Hill. “We usually have a hard time actually getting a concise message.”
With major reforms stalled, attention is shifting to smaller health care bills focused on affordability. Senate Finance Committee leaders have introduced bipartisan legislation to reform the pharmacy benefit manager industry, a measure that nearly passed last year. Schumer, for his part, promised to keep up the fight: “We fought like hell to stop these hikes, and we’re going to continue to fight like hell to bring costs down to the American people on health care, on housing, on electric rates, on groceries.”
For now, though, millions of Americans are left in limbo—caught between partisan gridlock and the harsh reality of rising health care costs. The coming weeks will test whether Congress can find a last-minute solution, or whether political posturing will once again trump practical action for those who need it most.
