The Bellevue Compass

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With the clock running out on 2025, Congress appears set to leave Washington without addressing what we’re all waiting for: the expiration of Obamacare subsidies. Insurance premiums are already high, but they’ll skyrocket come January unless the subsidies are extended, something that doesn’t look likely. We have a breakdown below of what happened this week, and how the healthcare fight is shaping up to define the 2026 midterms. 

Something major changed as we were writing this: four GOP lawmakers stunned Speaker Johnson by backing a Democratic push to extend the pandemic-era Obamacare subsidies, effecteively pushing legislation to extend the subsidies into a vote without the Speaker’s approval. 

The discharge petition, lead by House Minority Leader Hakeem Jeffries, has 218 signatures needed to guarantee a vote—but, that floor vote cannot be forced until January, under the rules. The four who tipped the scales are New York Rep. Mike Lawler and Pennsylvania Reps. Brian Fitzpatrick, Ryan Mackenzie and Rob Bresnahan. 

“Thos procedural step is not an endorsement of the bill written,” Rep. Lawler clarified, “I continue to believe any extension should be targeted, fiscally responsible, and include income eligibility limits and safeguards against fraud, similar to the bipartisan discussions underway in the Senate.”

The House is still expected to vote today on a separate healthcare proposal from the GOP—which we’ve detailed below. 

What’s Going on in Congress

Last Thursday, the Senate voted on two competing healthcare plans, and both failed spectacularly. Neither managed to clear the 60-vote threshold needed to advance, and now the impending expiration hangs over nearly 22 million Americans' heads as subsidies are set to expire December 31. The Democratic plan featured a straightforward three-year extension to enhanced ACA credits. The Republican alternative, put together by Senators Bill Cassidy of Louisiana and Mike Crapo of Idaho, proposed letting subsidies expire in favor of funneling money into health savings accounts. 

Speaker Johnson shut the door on giving moderate Republicans the chance to vote to extend the ACA subsidies, garnering major backlash. Rep. Brian Fitzpatrick of Pennsylvania, and a number of other Reps, have been pushing for an amendment that extends subsidies for two years and works alongside other GOP-preferred plans, like income caps and anti-fraud reforms. The proposal brought before the House Rules Committee on Tuesday evening was promptly rejected. 

Now, the House GOP is back with a new idea, and Speaker Johnson is setting a vote for today—but will the plan be enough to bring moderates in line with the rest of the party? The new bill doesn’t extend enhanced subsidies, but leadership is, in Politico’s words, “expected to throw a bone to anxious [members] by giving them the chance to vote on an amendment that would continue the subsidies — a vote that’s almost guaranteed to fail.”

Here’s what is in the bill: 

CHOICE Accounts: An idea from Oklahoma GOP Rep. Kevin Hern, that would allow employers to offer worker tax–advantaged funds to pay for individual health insurance, rather than offering a traditional group plan. Notably, this also includes an offer of tax-incentives for employers who opt-in to such arrangements. 

Cost-Sharing Reduction payments, beginning in 2027, which would restore federal payments to insurers that lower deductibles and out-of-pocket costs for low-income ACA enrollees. This is being advocated by Republicans to stabilize the individual market and reverse premium inflation. These payments were canceled by the Trump administration in 2017, an action intended to undermine the ACA. However, this cancellation led insurers to adopt "silver loading," a practice of increasing premiums on silver-tier plans, which unexpectedly drove up federal subsidy costs.

There’s also new transparency requirements, which force the Pharmacy Benefit Managers—the middlemen who negotiate drug costs with larger pharmaceutical companies on behalf of insurers—to provide reports on prescription drug spending, rebates, and pricing practices. This measure does have bipartisan support, since it makes an attempt at major transparency between insurers, pharma companies, and the government.

Association Health Plans, which allow small businesses and self-employed individuals to essentially pool together across industries to buy coverage, a move that would—theoretically—lower premiums through group pricing. There’s a fear of this type of plan distorting the overall insurance market, as well as no guarantee that these plans would contain essential benefits. 

Finally, the plan includes a stop-loss policy access expansion, using a framework from The Self-Insurance Protection Act from Rep. Bob Onder (R-Mo.). This would expand employer access to “stop-loss” policies that enable them to protect against catastrophic health costs from just a few employees.

It’s worth noting that in all this, the plan doesn’t include the GOP’s health savings account proposal. 

The Pennsylvania Impact—Looking Ahead to 2026

In a recent Gallup poll, 29% of Americans cited healthcare cost as the most urgent national health problem, and a record-high 23% say the healthcare system is in crisis. 47% say they see major problems. While 57% of responders were satisfied with their own costs, it’s not unreasonable to say that the number may change if ACA subsidies expire and no healthcare plan is passed in the next day—literally. Congress leaves on the 18th. 

The deadline to sign up for ACA plans on the open market with coverage beginning January 1 was Monday—the higher costs of those plans has caused some people to decide to start the year uninsured. If there’s no compromise and Congress fails to pass a healthcare bill, negotiations will resume in January, but even if they manage to pass a retroactive extension on subsidies, the market will have to reopen to reflect the changes, a process that could take weeks. That’s consumer confusion, market volatility, and major changes in the risk pool—all damages that are hard to reverse. 

There’s a pattern of history that suggests Republicans are likely to lose some seats in the midterm election, which is historically not kind to the party in power. Democrats gained some ground in local elections back in November, and hopes are high from the party that the momentum will continue. While it’s too early to tell, it’s worth mentioning that the last time Congress went to bat over healthcare, Democrats swept forward during the 2018 election. 

Because Pennsylvania is a battleground state, major issues like healthcare become definitive during elections. In swing districts, Republicans are leading by a narrow margin and facing intense pressure, especially because some of these districts are rural, and tend to have older adults who are impacted significantly by expiring subsidies. In Rep. Ryan Mackenzie’s district alone, constituents are projected to see premium increases as high as 178%. As both parties argue “affordability”, the sticker shock of price increases is likely to mobilize voters in the opposite direction—in this case, against Republicans. 

Thus, the healthcare fight is likely to shake up the midterm elections, with rising costs becoming a major economically-connected voting factor for many Americans, including those in Pennsylvania. 

🔥 What We’re Watching

Did You Know? Potter County, PA, is home to the only Triple Continental Divide east of the Mississippi. At this spot in the county, water flows into the Gulf of Mexico (through the Allegheny River), the Chesapeake Bay (through Pine Creek), and the Gulf of St. Lawrence (through the Genesee River).

Till next time,