Republicans unveil health care plan to counter Democratic bid to extend ACA subsidies
With expiring Affordable Care Act tax credits fast approaching, Senate Majority Leader John Thune announced Tuesday that two competing plans, one led by Democrats and the other by Republicans, will receive votes in the Senate on Thursday.
But neither bill is expected to provide the support it needs to move forward; This leaves tens of millions of Americans out in the cold, who could see their health care costs skyrocket at the start of the new year.
Republican plan
Thune’s announcement Tuesday marked the first time Senate Republicans have united around a single health plan to respond to expected price increases that Americans who currently receive ACA tax credits will face in 2026.
The proposal would eliminate the enhanced tax credits and instead take the extra money from those tax credits and transfer it to the health savings accounts of those who purchased bronze-level or “catastrophic” plans on the ACA exchanges. Republicans say it will help Americans pay out-of-pocket costs.
Under the plan, individuals earning less than 700% of the federal poverty level would receive $1,000 from the HSA for those ages 18 to 49 and $1,500 for those ages 50 to 64.
Jim Lo Scalzo/EPA/Shutterstock – PHOTO: Republican Senate Majority Leader John Thune speaks to reporters outside his office at the U.S. Capitol in Washington on December 3, 2025.
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The plan was first announced Monday by Senate Health Committee Chairman Bill Cassidy and Senate Finance Committee Chairman Mike Crapo.
Senators say it would lower 2027 premiums by 11% by funding reductions in cost sharing and give Americans the power to choose the insurance plan “that fits their needs.” The proposal also requires states to verify citizenship and immigration status before coverage to prevent “illegal immigrants” from accessing Medicaid. The proposal would also prevent funds from being used for abortion and gender-affirming care.
Thune said the plan represents an effort to reform the ACA and address GOP concerns that increased tax credits are causing insurance premiums to rise. They also say money is given directly to patients. Just as President Donald Trump said he wanted to happen.
Yuri Gripas/EPA/Shutterstock – PHOTO: President Donald Trump participates in a roundtable discussion in the Cabinet Room at the White House on December 8, 2025 in Washington.
How did Affordable Care Act subsidies become an issue in the government shutdown?
“This is a failed program and does nothing but raise premiums,” Thune said of the expanded tax credits Democrats want to pursue. “So who will the increase in premiums go to? This will go to the insurance companies.”
“So the proposal we put out there will lower insurance premiums, be fiscally responsible, and move us away from the practice of giving all the money to insurance companies and then putting it back into the hands of patients,” Thune added.
That plan has emerged as the most popular choice for Republicans among a crowded field of GOP health care proposals that have emerged in recent weeks. Thune said he believes the majority of his conference supports it.
“What I can tell you as a conference is that our members are united — and I can’t say 100%, but I think for the most part — behind the Crapo-Cassidy proposal, which, as I said before, is, in its emphasis, about patients, not insurance companies, and about lowering premiums, not raising them, and getting a better return for federal taxpayers,” Thune said. he said.
democratic plan
The Democrat-led bill calls for a three-year extension of expired ACA tax credits.
The upcoming vote, weeks in the making, is being awarded to Democrats as part of a deal struck in November to end a record 43-day government shutdown.
Democrats won no concrete health care concessions under the deal to fund the government. However, they were promised a vote on a health bill of their choice and they chose this 3-year extension.
J. Scott Applewhite/AP – PHOTO: Senate Minority Leader Chuck Schumer and House Minority Leader Hakeem Jeffries meet with reporters about health care affordability at the Capitol in Washington on December 3, 2025.
Senate Minority Leader Chuck Schumer, one of the Senate’s top Democrats, said in his speech at the podium, “Democrats put forward the cleanest, fastest and most realistic solution: a three-year extension of existing tax credits. No gimmicks, no poison pills.”
Schumer’s strategy is in line with Leader Hakeem Jeffries’ proposal in the House, where Democrats filed a habeas corpus petition to force a vote on a three-year extension of the tax credits. The petition received 214 signatures; Only four signatures failed to trigger a vote in the lower house. So far, no Republicans have joined the effort.
Will both plans pass the Senate?
Both of these bills are certain to fail to get the 60 votes they need to advance in the Senate on Thursday.
Thune has repeatedly criticized Democrats’ plan for its failure to implement reforms in the ACA.
“There are no income limits, $0 premiums. There are millions of Americans who don’t even know they are insured, they just decided to do nothing.” — “There would be zero, zero reform to this program and therefore the bill that they would put on the table would fail,” Thune said.
Schumer, meanwhile, called the Republicans’ “phony” plan “dead on arrival.”
“Their bill is junk insurance. It has been rejected in the past. The American people will reject it again because scrap insurance is what puts the burden on people,” Schumer said.
