(Photo by Roberto Schmidt/Getty Images)
THE WHITE HOUSE ON SUNDAY was gearing up to roll out a major proposal: the outlines of a prospective deal on expiring Affordable Care Act subsidies that would stop, or at least mitigate, premium hikes about to hit 20 million Americans.
The proposal, as first reported by MS NOW, was to include a two-year extension of the enhanced subsidies, along with a series of modifications (like an option to invest the subsidies in personal savings accounts) in line with conservative priorities. And the most striking thing about it was its seriousness, at least by the standards of the Trump White House. It had concrete details, the kind an administration puts on the table when it wants to craft legislation. Simply by endorsing an extension, something Trump had previously seemed to rule out, it signaled interest in courting Democratic support. Indeed, two Democratic senators who have been working on bipartisan subsidy legislation praised the effort as a constructive step.
But as a summary of the proposed White House deal circulated on email and text chains—eventually landing in my inbox—it became apparent that the president’s team had not fully checked in with a key party to the negotiations: congressional Republicans. Blowback started immediately, including from House Speaker Mike Johnson, who according to a subsequent report in the Wall Street Journal told Trump that House Republicans “don’t have an appetite” for any kind of subsidy extension.
And so, on Monday, administration officials started telling reporters that no proposal was imminent—a message that White House Press Secretary Karoline Leavitt conveyed more formally in the afternoon. “Health care is a topic of discussion that’s happening frequently and robustly inside the West Wing right now,” Leavitt told a gaggle with reporters. “The president is very focused on unveiling a health care proposal that will fix the system and bring down costs for consumers.”
The delay and the disunity, the assurance that furious work is being done behind the scenes, and the promises of a plan on the verge of being revealed—all of it will sound familiar if you have followed how Trump and Republicans have handled health care ever since the Affordable Care Act became law.
Over and over again, they have promised they have a better alternative. But their plans almost never materialize. And when they do they tend to be deeply unpopular, mainly because they involve rolling back protections for pre-existing conditions and leaving many millions of Americans without insurance. Republicans always find themselves stuck between their instincts to hack away at “Obamacare” and their desire not to incur the voters’ wrath.
Now a version of that dynamic is playing out yet again. The premium increases from the expiring enhanced subsidies will disproportionately affect red districts and red states, hitting core GOP constituencies like farmers and small business owners. That’s why vulnerable, so-called “frontline” House Republicans have been agitating for a deal, as has retiring Georgia congresswoman Marjorie Taylor Greene. The tentative offer the White House started circulating Sunday night was a signal that Trump recognizes the political danger of letting those subsidies lapse and is looking for a way out.
But conservative Republicans in the House have indicated they want either no extension or one that includes dramatic changes to the Affordable Care Act, up to and including provisions—like rolling back pre-existing condition rules—that could honestly be described as a partial repeal. Meanwhile, no deal can become law without passing the Senate, where Republicans will need multiple Democratic votes unless they are prepared to nuke the filibuster.
A deft administration sizing up this situation—and motivated by Trump’s truly dismal poll numbers—might be able to find its way through all this, especially if it were willing to engage in some old-fashioned triangulation. It’s not that hard to imagine a compromise that could pass both houses with a minority of Republicans joining Democrats, if Trump got behind the idea. It might even include some terms Trump was prepared to offer on Sunday.
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But nothing in the history of this White House suggests Trump or his lieutenants have that mettle or those skills. And it’s getting late. The time to introduce a deal with these many moving parts was in February when Democrats were first raising the issue. Or in August, after the debate over Trump’s One Big Beautiful Bill had everybody talking about health care. Or even in October, during the government shutdown, in which the subsidies were the central dispute.
With open enrollment in its fourth week, millions of Americans have already picked insurance policies. Soon they’ll have to start paying for them, in order to have coverage that kicks in on January 1. That pending calamity might serve as an incentive to move quickly. But as the White House found out this week, if you start proposing complex solutions then you can expect to run into new problems—including one that has always made health policy legislation difficult to pass, and not just for Republicans.
THAT ISSUE IS ABORTION, which very nearly prevented the Affordable Care Act from becoming law in the first place.
Back in 2009 and 2010, there were still congressional Democrats opposed to abortion rights who wanted to make sure federal dollars would not pay for the procedure. The Hyde Amendment already stipulated as much, but anti-abortion Democrats wanted stronger assurances. It took painstaking negotiations by Democratic leaders—and the (figurative) blessing of groups representing Catholic medical facilities, like the Catholic Health Association—to work out a deal that became part of the law. That deal remains in force today.
Under its terms, states can decide to prohibit Affordable Care Act insurance plans from covering abortion, or they can mandate that the plans cover abortion, or they can leave it up to the insurers to decide. In any cases where insurers are covering abortion, they have to stay true to the Hyde Amendment by creating separate pools of money to pay for the services and making sure no federal subsidies go into those funds.
This deal has never sat well with opponents of abortion rights, who argue the segregation of federal dollars is nothing more than an accounting fiction—that money is fungible, no matter what it says on the insurance company spreadsheets. They have wanted reforms and they got some during Trump’s first administration, when officials took a series of executive actions designed to separate the funds more clearly. But that was just a start, and even then the courts blocked some actions while the Biden administration rescinded the rest.
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This time around, opponents of abortion rights have bigger ambitions: They want to wipe out any abortion coverage in Affordable Care Act plans, in any state. And they see a subsidy extension as a vehicle for doing it. Specifically, they want to attach language to any proposal extending the subsidies that would prohibit abortion coverage in any insurance plan that accepts federal money—which is another way of saying any insurance plan in the Affordable Care Act, because they all have at least some subsidized customers.
This would have no effect in twenty-five states that already prohibit abortion coverage for their Affordable Care Act plans. But there are thirteen states, plus the District of Columbia, where officials allow insurers to decide whether to pay for abortion. There’s no hard data on how many plans actually make abortion coverage available, but the widespread assumption is that most and possibly all would drop it if that proposed language made it into law.
That would leave the twelve states that require insurers to cover abortion.
“This would be hugely disruptive, and very much stepping on state law,” Katie Keith, director of the Center for Health Policy and the Law at Georgetown University’s O’Neill Institute, told me. States determined to make abortion coverage available might be able to find workarounds, but they’d be janky and would still require enactment of new laws.
“This would put states in an impossible position—having to decide whether to maintain access to comprehensive reproductive health care or forgo billions of dollars in premium tax credits for their consumers,” said Keith, who also worked in the Biden administration.
The summary of a proposed subsidies deal that the Trump administration began circulating Sunday—at least the version I saw—did not mention the Hyde Amendment. That would be consistent with the pledge Trump sometimes made as a candidate in 2024 to leave abortion to state discretion. It would also be keeping with Trump’s desire to maintain a GOP majority in Congress, because several vulnerable House Republicans are in Michigan, New York, and Virginia—three states that currently allow or mandate abortion coverage in Affordable Care Act plans.
But that may not be enough to deter Republicans from insisting on new rules, as some in the Senate have already indicated they intend to do. And their doing so would make the hunt for necessary Democratic votes even more difficult, or maybe impossible. Jeanne Shaheen, the New Hampshire Democratic senator who has spearheaded bipartisan talks on the issue, has already told NBC News new abortion restrictions are a “nonstarter.”
ABORTION ISN’T THE ONLY NEW WRINKLE in the subsidy debate that could make finding consensus more difficult. Another is a proposal to “appropriate” what are known as “cost-sharing reductions.”
From the technical description, it sounds like an effort to make sure people have lower deductibles and copays. It would actually have the opposite effect.
The story here goes back to Trump’s first term, and a decision he made to stop reimbursing insurers for special plans with lower copays and deductibles that are available to lower-income consumers. It was a clear effort to sabotage the Affordable Care Act, and legally questionable as well. Insurers and state regulators reacted by raising the prices of certain plans, in a way that took advantage of the Affordable Care Act’s pricing formulas to trigger extra subsidies for individual consumers.
It was all very convoluted and difficult to explain, even for those of us who write about these issues for a living. But the net effect was more money going to help people buy insurance, allowing them to either save money or buy more generous coverage. A proposal now under consideration—and unlike the abortion restrictions, one that actually appeared in the Trump administration summary circulating on Sunday night—would start up the payments again, effectively reversing the process.
“That would lead people to pay more in premiums or switch to a plan with higher deductibles—or go without insurance altogether,” Larry Levitt, executive vice president at the health research organization KFF, told me.
Other items the administration was floating include changes like a prohibition on plans with zero-dollar premiums (in theory, to combat fraud) and a new income cap on who can get benefits. While the effects of these modifications would vary a lot from person to person, the cumulative impact would be a less generous set of subsidies up and down the income scale.
“What’s notable about the White House draft is that, for a proposal to stop the spike in premiums, nearly everyone impacted would have still gotten a premium increase,” Anthony Wright, executive director of the advocacy organization FamiliesUSA, told me.
Democrats in Congress may be willing to stomach some of these changes for the greater good of extending subsidies for so many more people. But the obvious alternative to a deal with so many components is a deal without them.
That could mean a truly “clean” extension with no modifications that keeps the money for a year or two. It could also mean something like the bipartisan bill from Don Bacon, the retiring House Republican from Nebraska, who has proposed a two-year extension with mostly minor adjustments (like actual anti-fraud measures) that Democrats would happily support.
The calendar wouldn’t be quite so unkind to that sort of agreement. The legislation that first created the extra subsidies became law in 2021, and was retroactive to the beginning of the year. Lots of people benefited. At the same time, the 2021 bill’s timing was far from ideal. Plenty of people who would have opted into more generous plans with extra subsidies never did. And plenty who would have enrolled initially if the prices had been lower decided against coverage and never checked back.
“It’s possible to extend the ACA tax credits at any point,” Levitt said. “But the longer it takes, the more people will fall through the cracks.”
And that’s assuming there’s even a deal to be had. On paper, an agreement to extend subsidies temporarily is the kind of obvious win-win that, in the past, other Congresses have reached with other presidents. But from the looks of things, this Congress has forgotten how to make those kinds of deals—and this president never knew how in the first place.
