A bipartisan group of House lawmakers unveiled a proposal on Monday aimed at temporarily extending the enhanced tax credits under ObamaCare. This plan introduces both a sunset clause and an income cap for higher earners.
The proposal, termed a “statement of principles,” comes from centrist Representatives Don Bacon (R-Neb.), Tom Suozzi (D-N.Y.), Jeff Hurd (R-Colo.), and Josh Gottheimer (D-N.J.). It stands as the sole public initiative addressing these subsidies since the government shutdown began over a month ago.
Democrats remain firm in their stance that any resolution to the shutdown should include a continuation of these enhanced subsidies, which are set to expire at the year’s end. They have criticized Republicans, accusing them of indifference to the financial impact on consumers due to a lack of interest in extending the subsidies.
Republicans, on the other hand, argue that health-related negotiations should follow the reopening of the government. Many within the party are reluctant to support the extension, claiming that the tax credits obscure the fundamental issues with ObamaCare.
Moderate Republicans are increasingly frustrated with Speaker Mike Johnson (R-La.), who has kept the House out of session since September. They are urging him to consider extending the subsidies, but Johnson has remained steadfast, insisting that Democrats first approve the House-passed continuing resolution to fund the government before any subsidy discussions occur.
Some vulnerable Republicans and moderate Democrats released legislation for a one-year extension of the tax credits in September. The latest plan could be a sign that lawmakers are starting to look for an off-ramp to the stalemate, though there’s no indication that leadership on either side backs the framework.
“Congress is gridlocked, and too many Americans have lost faith that we can work together. But here’s the truth: Democrats and Republicans can sit down, listen to one another, and find common ground, especially when it comes to lowering health care costs,” Bacon, Suozzi, Hurd and Gottheimer said in a statement.
“Compromise isn’t rocket science, and it shouldn’t be treated like a weakness … Our hope is that this shared statement of principles will inspire bipartisan collaboration across Washington and help get Congress back to work for the American people,” they said.
The lawmakers’ plan would extend the subsidies for the next two years only, with an income cap on eligibility for people earning between $200,000 and $400,000. There is currently no income limit, though the subsidies ensured that no one paid more than 8.5 percent of their annual income.
To appease conservatives who say the subsidies fuel fraud, the lawmakers proposed a series of “guardrails” including requiring Affordable Care Act marketplaces to confirm that recipients haven’t died, and for both parties to identify ways to crack down on unscrupulous agents and brokers who engage in fraud when enrolling people in ACA health plans.
The plan also calls for marketplaces to better notify recipients of the value of the enhanced tax credits they are receiving from the federal government.
But many conservatives want to use the expiration of the enhanced subsidies as an excuse to tackle broader health care reforms and potentially undo more of the Affordable Care Act. It’s unlikely they would back a plan that extends the tax credits without deeper concessions.
Most people enrolled in Affordable Care Act plans are eligible for financial assistance, so they are not paying full price, a fact cited by Republicans opposed to an extension. Even if the extra subsidies expire at the end of the year, a majority of enrollees will still be eligible for assistance to lower their monthly premium costs.
But those hit hardest will be the higher-income people, especially small-business owners who relied on the enhanced tax credits.
