Republicans are split on extending Obamacare tax breaks as higher costs loom

WASHINGTON — Republican leaders are facing growing calls from their members to extend a bucket of funding for the Affordable Care Act that is slated to expire at the end of this year as some look to avert insurance premium hikes and millions of Americans losing health coverage.

But the cause faces opposition from conservatives who detest “Obamacare,” as the law is nicknamed, and don’t want to lift a finger to protect it. Some argue it’d be too expensive to continue the premium tax credits, which cost over $30 billion per year and were initially adopted as part of a Covid-19 response.

The nonpartisan Congressional Budget Office projects that about 5 million Americans will lose their insurance by 2034 if the money expires.

Rep. Jason Smith, R-Mo., the chair of the tax-writing House Ways and Means Committee, said “a lot of people” are discussing how to address the ACA subsidies. But the party is torn.

“I’m not saying where I am on that issue, but it’s definitely part of the conversation,” Smith told NBC News. “There’s some interest to do something. There’s some interest to do nothing. So it’s threading that needle.”

Rep. Brian Fitzpatrick, R-Pa., who represents a swing district that President Donald Trump lost in 2024, said in an interview that Congress should continue those ACA tax credits in order to avoid price increases.

He said he’s involved in an effort to offer a legislative fix.

“I think we gotta be doing everything to keep costs low across the board — health care, groceries, energy, all of the above. So I am currently working on addressing that as we speak,” he said.

Trump pollster warns of ‘political penalty’

Last week, Trump’s longtime pollster Tony Fabrizio co-authored a memo with Bob Ward warning that extending the health care tax credits is broadly popular, even with “solid majorities of Trump voters and Swing voters.” They warned that the GOP will pay a “political penalty” in the competitive districts in the 2026 midterm elections if the funding expires on schedule.

It’s not just centrists or Republicans in competitive areas who want to keep the funds flowing. The appetite has grown among others in deep-red states as insurers threaten to raise premiums in anticipation of the funds going away.

GOP Sen. Mike Rounds, who faces re-election next year in ruby-red South Dakota, also backed the idea.

“I think that they should be extended. I think there’s plans in place right now to try to extend them,” he said. “The goal would be to try to find some offsets that would be amenable to Democrats as well. But I don’t think it’s fair to the people that have been stuck with Obamacare and have no place else to go.”

Rounds said he expects GOP support to grow for a path that “takes care of these folks that literally have no place else to go to get their health insurance.”

“They would be losing it through no fault of their own,” he said.

The funds were adopted by Democrats as part of a Covid-19 stimulus bill in 2021 and extended the following year through 2025. This policy seeks to address the “subsidy cliff” where ACA funding dries up for people above 400% of the federal poverty level. The subsidy enhancement caps premiums at 8.5% of income for individuals and families above that level.

Rep. Andy Harris, R-Md., the chair of the hard-right House Freedom Caucus, said he “absolutely” wants that funding to end.

“It’ll cost hundreds of billions of dollars. Can’t afford it,” he said. “That was a Covid-era policy. Newsflash to America: Covid is over.”

Tuberville: ‘We need health care’

The CBO and the Joint Committee on Taxation project that it would cost $335 billion over a decade to make the subsidies permanent.

Even Sen. Tommy Tuberville, R-Ala., who is running for governor, is calling on his party to consider an ACA funding extension, but he said the cost of a long-term fix is a concern.

“It’s all got to be evaluated,” he said. “I live in a state where people — we need health care. But only if we can afford it.”

Rep. Chip Roy, R-Texas, said: “Good luck finding a pay-for or math that works on that. Nonstarter for me.”

Some Republicans on the Senate Finance Committee, which oversees taxes and health care policy, chafe at the cost.

“The extension is very expensive, so we got to look at what the options are. But it’s an expensive proposition,” said Sen. Steve Daines, R-Mont.

Sen. Ron Johnson, R-Wis., responded with a flat “no” when asked if he favors preserving the ACA money.

Asked about colleagues who worry about coverage losses and premium hikes, Johnson replied, “I think they’re way overblowing those concerns.”

And Sen. Roger Marshall, R-Kan., said Congress should use the opportunity to move beyond the ACA.

“I’m a lean-no on doing anything to help subsidize the ACA,” he said. “There’s just much better ways to handle this.”

Sen. Bill Cassidy, R-La., who is a member of the Finance Committee and chairs the Health, Education, Labor and Pensions Committee, punted on the ACA subsidies question.

“I think it needs to be studied,” he said.

Republican Sen. John Cornyn, who is running for re-election to his Texas seat, didn’t close the door to an ACA funding extension, but said he’s open to modifying the thresholds. “We need to have a discussion about what level is appropriate,” Cornyn said, while adding that it could be paired with policies to “eliminate the waste and fraud” in health care.

‘It’s on the radar,’ Speaker Johnson says

Democrats slammed Republicans for declining to include an extension of the ACA funding in Trump’s “big, beautiful bill,” claiming the GOP will be responsible for the coverage losses.

“Republicans have plenty of time to ram through tax cuts for billionaires — but they literally haven’t even talked about extending health tax credits for working-class families,” Sen. Patty Murray, D-Wash., said on X. “Republican indifference is a major reason why your premiums will be spiking dramatically THIS YEAR.”

GOP proponents say there are other opportunities to extend the funds — including a stand-alone bill or a year-end package of various health care provisions and tax extenders. One thing is clear: Republicans will need Democratic support, given the divisions in their own ranks. And they may need to modify the existing version to make it palatable in the party.

Sen. Thom Tillis, R-N.C., an early proponent of continuing the funds, said this week that “there’s a question about whether or not it’s the current program straight up, or some modification to get Republicans on board.”

For now, top Republican leaders are keeping their powder dry about whether — or how — they will take up the issue.

“I think that goes to the end of the calendar year, so we’ll have discussion about the issue later. But it hasn’t come up yet,” House Speaker Mike Johnson, R-La., told reporters on Tuesday when asked about an ACA subsidy extension. “But it’s on the radar.”

Senate Majority Whip John Barrasso, R-Wyo., said he hasn’t seen the Fabrizio Ward polling memo but didn’t shut the door to an extension, saying, “Everything is for negotiation, of course.”

But he criticized the Democrats’ decision to boost that funding in the Biden administration.

“I think what Joe Biden and his administration have done went way beyond the original intent of the legislation,” Barrasso said. “So I think that was done poorly and wrongly.”