The Senate is set to vote on 2 rival health plans. Here's what's at stake for Americans

NEW YORK (AP) — When the U.S. Senate votes on rival, partisan health bills on Thursday, they’ll have two chances to address expiring COVID-era subsidies that will otherwise result in millions of Americans saddled with higher insurance costs in the new year.

But with neither piece of legislation expected to pass, the problem is yet unresolved with just three weeks until the subsidies run dry and some Affordable Care Act enrollees see their premium costs more than double.

Meanwhile, the political stakes of rising premiums are coming into view as affordability concerns have emerged as a key issue for American voters going into the midterms next year.

Here's a look at the subsidies in limbo, the proposals to address the problem and how American voters are feeling about the issue.

The Affordable Care Act subsidies brought down costs

More than 24 million people have Affordable Care Act health insurance, a group including farmers, ranchers, small business owners and other self-employed people who don’t have other health insurance options through their work.

Enrollees who make less than 400% of the federal poverty level qualify for permanent subsidies in the program that help them offset premium costs.

In 2021, Democrats in Congress added additional subsidies, known as enhanced premium tax credits, that apply to enrollees regardless of their income. Those COVID-era subsidies are the ones slated to expire on Jan. 1.

With the expanded subsidies, some lower-income enrollees received health care with no premiums, and high earners paid no more than 8.5% of their income. Eligibility for middle-class earners was also expanded.

Without an extension of the subsidies, health care costs will rise for millions

If the tax credits expire, the average subsidized enrollee will see their annual premium payments go up by 114%, from an average of $888 in 2025 to $1,904 in 2026, according to the health care research nonprofit KFF.

Especially hard-hit groups will include a small number of higher earners who’ll have to pay a lot more without the extra subsidies and a large number of lower earners who’ll have to pay a small amount more, said Cynthia Cox, a vice president and director of the ACA program at KFF.

Some enrollees, especially those who are young and healthy, are likely to drop out of coverage entirely rather than pay the steeper fees, experts say. A recent KFF poll found that 1 in 4 enrollees said they would “very likely” go without health insurance if their premiums doubled next year.

Others might opt for ACA plans with cheaper premiums that have worse coverage and higher deductibles.

In most states, for Americans who want coverage to start Jan. 1, the window to shop for Affordable Care Act coverage began Nov. 1 and ends Dec. 15.

Democrats back an exte

nsion, while Republicans pitch swapping subsidies for savings accounts

The plan championed by Senate Democratic Leader Chuck Schumer would allow the vast majority of Affordable Care Act enrollees to keep benefiting from the enhanced subsidies for an additional three years. It would save millions of Americans money in the short term – and allow some who might otherwise consider skipping coverage to stay insured.

The Congressional Budget Office has estimated this option would add nearly $83 billion to federal deficits over the next decade. The bill also doesn’t address alleged fraud in the system. The Government Accountability Office recently warned in a report that some fake applicants were able to get coverage.

Republicans on Thursday will back a different proposal from Sen. Bill Cassidy (R-La) and Sen. Mike Crapo (R-Id) to scrap the subsidies in favor of health savings accounts that will be funded for the next two years.

To be eligible, enrollees would have to choose a lower-cost, higher deductible bronze or catastrophic health insurance plan and make less than 700% of the federal poverty level. Those aged 18 to 49 would get $1,000 a year, while those 50 and up would get $1,500.

The money could be spent on health costs like copays, deductibles, or any other qualified health-related items directly from companies. But it couldn’t be used on premiums – which health analysts warn could pose a problem when low-income Americans must first afford coverage to get access to the cash.

Cassidy and Crapo say their bill provides better support to Americans than the expiring subsidies do because it hands money directly to the people, giving them the power to decide how to spend or save it — a message President Donald Trump has echoed in recent weeks.

Democrats disagree and argue the GOP plan leaves Americans without help for their high premiums, encouraging the purchase of junk plans that provide bad coverage.

The political stakes are only growing

Thursday's votes come as lawmakers' anxieties are rising around the upcoming 2026 midterms, when Americans' pocketbook concerns — including health costs — are expected to be on the ballot in their districts.

Democrats, who forced a 43-day shutdown over the expiring subsidies earlier this fall, are sure to shine a spotlight on the subject next year if no extension is reached. Republicans may lash back by noting it was the Democrats in charge who made the enhanced subsidies temporary in the first place.

At the same time, the GOP is split over a path forward to the expiring subsidies. In the House, moderate Republicans who are up for reelection have been pushing Speaker Mike Johnson, R-La., to extend the subsidies with new reforms while the right flank of the party has demanded deeper changes to an Affordable Care Act program they have long disliked.

Last month, the White House circulated a plan to extend the subsidies for two years while adjusting eligibility requirements – but it ran into Republican pushback on the Hill and hasn’t had much traction since.

Trump in a speech on Wednesday seemed to advocate an entirely different plan — giving people money to buy their own health insurance plans. Sen. Rick Scott (R-Fl) has introduced such a bill, but it isn’t the one scheduled for a vote on Thursday.

On Wednesday, House Republican Leader Steve Scalise said leadership “laid out to our conference today a menu of options” relating to healthcare, some of which could be brought to the floor as soon as next week. He said members would look at other proposals on health care next year.

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Associated Press writer Joey Cappelletti in Washington contributed to this report.