House OKs health bill without extending ACA credits

The Affordable Care Act cost cliff likely will hit as Americans ring in the New Year, now that the House of Representatives approved an alternative health care bill that does not include extending enhanced tax credits that are due to expire Dec. 31.

The bill includes policies that are popular among Republicans — including funds to pay for “cost-sharing reductions,” reforms to the pharmacy benefit manager industry, and an expansion of association health plans. But nothing in the bill addressed extending the enhanced tax credits that were part of the Inflation Reduction Act of 2022.

Wednesday’s 216-211 vote on the legislation all but guarantees the enhanced subsidies will expire, as the Senate is unlikely to take up the bill. Congress leaves Washington for its Christmas break on Friday.

The House vote came on the heels of a discharge petition filed by House Minority Leader Hakeem Jeffires that would force an up-or-down vote on extending the ACA enhanced tax credits. The petition was signed by 214 House Democrats as well as four moderate Republican congressmen.

Under House rules, a completed discharge petition is subject to a waiting period, meaning no vote could happen until next month — although the Speaker of the House could choose to move sooner.

The lack of action on addressing the enhanced tax credits means that 22 million ACA enrollees who receive premium assistance will see their out-of-pocket premiums increase by an average of 114%, or $1,016 per person, KFF reports.

Could a compromise come in January?

Republican moderates in the House are now discussing options with their Senate counterparts about a bipartisan compromise bill that could pass both chambers. The lawmakers involved in these talks said they hope to be able to produce a proposal before the next government funding deadline Jan. 30.

House Speaker Mike Johnson, R-La., told CNBC on Wednesday said he hopes to advance another reconciliation bill in the first quarter of the new year with more “revisions” to the health care system.

No deadline for extending ACA enhanced credits

While the enhanced ACA premium tax credits expire at the end of this year, there is no absolute drop-dead date for extending them. ACA enrollees would welcome premium relief whenever it comes, Larry Levitt, KFF executive vice president for health policy, said in a statement.

The ACA premium subsidies are refundable tax credits, which are calculated on an annual basis. Levitt said an extension could happen even after the deadline to sign up for coverage and be made retroactive to Jan. 1. Open enrollment could also be extended to allow people time to change their plans or allow new people to sign up. Enrollees could adjust their advance tax credits or receive a refund when they file their taxes.

“Logistically, state and federal ACA Marketplaces could adjust their systems quickly for a clean extension of the enhanced tax credits. That’s what happened in 2021, when the enhanced tax credits were created by legislation enacted in March. Any changes to the ACA tax credits mid-year would complicate the logistics and slow down the reopening of enrollment and the premium relief,” he said.

“While there is still time to extend the enhanced tax credits, with each passing day, more and more ACA Marketplace enrollees are going to drop their health insurance when faced with eye-popping increases in their premium payments.”