ACA Subsidy Renewal Likely to Stall Bipartisan Tax Legislation in 2026

Democratic lawmakers are unlikely to advance bipartisan tax legislation this year without first renewing enhanced Affordable Care Act (ACA) subsidies, according to senior staff for congressional tax leaders speaking with Bloomberg this week.

Democrats on Capitol Hill are expected to resist efforts to prioritize tax extenders or business-focused tax changes in upcoming government funding legislation, said Andrew Grossman, chief tax counsel for House Ways & Means Committee ranking member Richard Neal (D-MA). He warned against allowing those measures to “jump the line” ahead of health care priorities.

The enhanced ACA tax credits expired at the end of 2025, leaving millions of Americans who purchase coverage through the ACA Marketplace facing significantly higher premiums in 2026. According to the health policy research group KFF, about 22 million Americans (more than 90% of total ACA enrollment) received enhanced subsidies.

First enacted during the COVID-19 pandemic and later extended by the Inflation Reduction Act of 2022, the enhanced subsidies lowered premiums, particularly for middle-income earners. Their expiration reduces subsidy levels and eliminates eligibility for some consumers.

"We looked for a way to try to allow that pressure release valve, and it just was not to be," said Speaker Mike Johnson (R-LA) at a press conference, referring to the lapse in subsidies. "We worked on it all the way through the weekend, in fact, and in the end, an agreement wasn’t made."

Instead, House Republicans passed an alternative measure just before the holidays: the Lower Health Care Premiums for All Americans Act (H.R. 6703). 

This article was provided to OSAP by ASAE's Power of Associations and Inroads.