Sen. Bill Cassidy, R-La., answers questions from reporters after chairing a Senate Health, Education, Labor and Pensions Committee hearing on Sept. 17, 2025. (Photo by Jennifer Shutt/States Newsroom)
WASHINGTON — U.S. Senate Republicans announced Tuesday that they will hold a vote on their own health care proposal later this week to oppose a Democratic bill that would extend enhanced tax breaks for marketplace plans under the Affordable Care Act for another three years.
The 32-page GOP bill It wouldn’t solve the problem of expiring ACA marketplace tax credits, but it would send payments to some Americans through health savings accounts to cover some of the health care costs.
Neither solution requires the 60 votes needed to reach an agreement under this House’s rules. This would result in ACA marketplace subsidies ending at the end of the year and a dramatic escalate in health insurance costs for millions of people covered by these plans.
Senate Majority Leader John Thune, R-S.D., said Democrats’ bill to simply extend increased tax credits in the ACA marketplace to offset the costs Americans pay for this coverage is unacceptable.
“Because of the way the program is structured, the money goes directly to the insurance companies,” Thune said. “We think the way this should work is that you need to figure out a way to benefit patients rather than insurance companies.”
Thune said the Democrats’ bill lacks an income cap for tax credits in the ACA marketplace and allows $0 premiums for health insurance plans, ensuring it will fail.
Senate Democratic leader Chuck Schumer of New York called the GOP proposal a “botched decision” that would lead to “junk insurance.” He said the only way to avoid a dramatic escalate in health insurance costs next year is to extend the ACA’s enhanced tax credits.
“Their false proposition is dead on delivery,” Schumer said. “Not only does the bill fail to expand tax breaks, it increases costs, adds a slew of new abortion restrictions for women, increases garbage collection fees, and permanently funds cost-sharing reductions.”
Many plans
Senate Republicans have been debating for weeks whether to hold a vote on the GOP plan to show the party has something to offer toward lowering health care costs. Thune promised Democrats a vote on their chosen health care bill in exchange for votes to end the government shutdown.
Schumer announced last week that Democrats will abstain from voting on a three-year extension of the ACA’s enhanced tax breaks in their current form.
Several GOP senators, including Susan Collins of Maine and Bernie Moreno of Ohio, have released plans that include extending expiring tax credits while also beginning to phase out those subsidies.
But GOP leaders ultimately decided to hold a vote on the proposal released earlier this week by Health, Education, Labor and Pensions Committee Chairman Bill Cassidy, R-La. and Finance Committee Chairman Mike Crapo of Idaho.
Cassidy-Crapo’s legislation would direct the Department of Health and Human Services to deposit money into the health savings accounts of people covered by brown or catastrophic health insurance plans purchased through the ACA marketplace in 2026 or 2027, according to summary bill.
Health savings accounts are tax-advantaged savings accounts that consumers can apply to cover medical expenses that will not be otherwise reimbursed. These are not health insurance products.
ACA marketplace enrollees who choose a bronze or catastrophic plan and meet up to 700% of the federal poverty level will receive $1,000 per year if they are between the ages of 18 and 49 and $1,500 per year if they are between the ages of 50 and 64.
This would mean an annual income threshold of $109,550 for one person or $225,050 for a family of four, according to the report for 2025. federal poverty guidelines. The numbers are slightly higher for residents of Alaska and Hawaii.
A summary of the Republican bill says the funds cannot be used for abortion access or gender reassignment.
A proposal modeled on Trump’s comments
Cassidy and Crapo outlined how their proposal would work during afternoon speeches, during which they also aired their complaints about the impact of the Affordable Care Act on Americans’ health care costs.
Crapo blasted Democrats for enacting enhanced ACA marketplace tax breaks during the coronavirus pandemic and scheduling them to expire at the end of this year.
“The pattern has become clear: Democrats are responding to rising premiums by throwing taxpayer money at the problem,” Crapo said. “Their supposedly short-term fixes only raise premiums and make the problem harder to solve. Apparently we have no choice but to do the same thing over and over again.”
He said the GOP plan was modeled after President Donald Trump’s request to send funds directly to Americans to spend on health care.
“Families can use this money to cover costs that are not covered by their insurance policy without having to wait for insurance companies to approve their treatment decisions,” Crapo said. “Because families want the best value for money, they will seek the most appropriate treatment. Over time, this will translate into lower health care costs as providers compete for patients.”
Cassidy said the bill would not subsidize health insurance premiums but would assist some Americans pay for medical tests, dentist visits, glasses and prescriptions.
He said once eligible ACA marketplace participants receive funds in their savings accounts, they will shop around for better rates, including for X-rays, which are often used to determine whether someone has broken a bone.
“She’ll say, ‘Wait a minute, an X-ray is $150 here and $500 there. I’m going where it’s cheaper, not more expensive,'” Cassidy gave an example. “And I can tell you when that starts to happen, people who are more expensive start lowering their price.”
