Deadline Nears for ACA Subsidies — GOP Split Could Shape the 2026 Midterms

Republican leaders return to Capitol Hill facing a Jan. 1 deadline for enhanced Affordable Care Act (ACA) subsidies that help more than 20 million Americans afford coverage. With no unified plan in place, the party is deeply divided between centrists who want temporary relief to protect vulnerable incumbents and conservatives who oppose extending pandemic-era credits.

What’s at stake

If Congress allows the expanded tax credits to expire, health-care costs for millions of Americans would jump sharply just months before the 2026 midterm elections. For many House Republicans in swing districts, a short-term extension is seen as politically necessary; for some conservatives, any extension would be an unacceptable entanglement with a law they have long sought to roll back.

Political maneuvering and a shelved White House plan

Reports said the White House prepared a two-year extension of the enhanced credits with new eligibility limits — a compromise intended to protect vulnerable Republicans while lawmakers pursue broader reforms. That proposal was pulled back after a backlash from conservative critics who described it as an unnecessary giveaway to insurers. Reportedly, Speaker Mike Johnson urged the White House to reconsider the plan, contributing to the decision to postpone an announcement.

Competing proposals and GOP divisions

Several temporary and structural options are now in play. Centrist members of the Problem Solvers Caucus have joined Democrats to back a two-year extension. Rep. Jen Kiggans (R-Va.) has introduced a one-year extension supported by other House Republicans. Separately, lawmakers are exploring ways to convert subsidy funds into accounts or tax-preferred savings vehicles: Sen. Bill Cassidy (R-La.) has proposed shifting enhanced subsidy dollars to Health Savings Accounts (HSAs) for high-deductible plan buyers, and Sen. Rick Scott (R-Fla.) has outlined a broader plan to create "HSA-style Health Freedom Accounts."

Legislative path and red lines

House leaders say they expect to propose GOP alternatives soon, with top lawmakers coordinating across committees to craft a plan. Yet conservative red lines complicate negotiations: several Republicans want provisions preventing federal credits from being used for plans that cover abortion services, a condition that Democrats are unlikely to accept.

Democratic strategy

House Democrats have advanced a discharge petition to force a vote on extending the current subsidies at existing levels for three years, which would move the next expiration past the 2028 presidential election. That effort is backed by nearly all House Democrats but has no Republican sponsors, meaning a handful of cross-aisle votes would be required for passage.

Voices from both sides

"Our number one objective is to drive down the cost of health care while maintaining quality of care and access to care," Speaker Mike Johnson said as Republicans prepared competing proposals.

Some Republicans privately and publicly oppose an extension; others argue that a short-term fix would buy time to develop longer-term market-oriented reforms. "Look, I don’t like the thing, but at least he’s proposing some changes," Rep. Tim Burchett (R-Tenn.) said of the White House plan before it was pulled. "Everybody’s griping and moaning about it, [but] at least [there is] an effort to do something about it."

With the Jan. 1 deadline looming, lawmakers face a politically fraught choice: extend the credits and risk alienating the GOP base, or allow them to lapse and trigger higher health costs for millions — a development that could reshape the 2026 midterm landscape and the future of federal support for ACA coverage.