The U.S. Senate on Thursday failed to pass competing health care proposals aimed at extending or replacing enhanced Affordable Care Act (ACA) premium tax credits, a legislative setback that advocates warn could send insurance costs soaring for millions beginning in 2026.
The chamber voted on two separate packages: a Democratic-led plan to extend enhanced premium tax credits for three years and a Republican-led alternative to end the credits and instead direct funds into Health Savings Accounts (HSAs) for certain plans, but neither secured the 60 votes needed to advance before the end of the year.
As a result, the enhanced subsidies, which were originally expanded during the COVID-19 pandemic, are set to expire on December 31, raising concerns of steep premium increases and reduced coverage options next year. Without an extension, premiums are widely expected to rise dramatically, potentially doubling for many marketplace enrollees.
Marilyn Cabrera, Health Care Policy and Advocacy Manager at Young Invincibles, said the failure to act showed a lack of urgency from lawmakers.
“The Senate’s failure to pass an extension makes its priorities abundantly clear, and it’s not young adults,” she said in a statement. “Millions of Americans will now be unable to afford health coverage and left to shoulder the burden alone.”
The impact could be especially severe in regions that have high numbers of subsidized enrollees. Noe Paramo, policy advocate with the California Rural Legal Assistance Foundation (CRLAF), warned that the cuts would have “devastating” consequences for low-income communities in the state’s Central Valley.
“The effect of the ACA cuts would be devastating, particularly in California and the San Joaquin Valley,” Paramo said. “There would be massive cuts to people’s health care — in the hundreds of thousands — especially for low-income individuals who rely on ACA coverage.”
He added that, beyond rising premiums, the loss of subsidies could fuel medical debt and strain rural health facilities that already struggle to serve their communities.
“It’s not just the increasing cost and the increase in premiums, it’s also the resulting medical debt that can happen because of lack of coverage,” Paramo said. “You would likely see an impact on rural hospitals and clinics, and worsening health outcomes and health disparities.”
According to Paramo, more than 200,000 San Joaquin Valley residents, including nearly 35,000 in Kern County, are enrolled in Covered California, with more than 90 percent receiving financial assistance.
“The failure to help our hardworking individuals and families is an injustice,” Paramo said, urging lawmakers to act quickly to extend the tax credits.
“Unless something happens quickly, people are going to have to make decisions that affect their health care, and we won’t be able to address it for another year,” he said. “This is very significant and very catastrophic for our San Joaquin Valley communities.”
