Obamacare Subsidies Expire This Month. Many Republicans Are Shrugging.

Obamacare premiums are set to spike for tens of millions of Americans next month. Plenty of rank-and-file Republicans are happy to sit back and ride it out.

Some vulnerable GOP lawmakers up for reelection are scrambling for a last-minute fix to renew the enhanced federal health care subsidies keeping costs down. But even if party leaders and President Donald Trump were to rally around a plan in the coming days — and there’s no sign of that happening — many conservatives are likely to revolt.

Democrats have vowed to hammer the GOP in the midterms if they allow the federal aid to expire, but many on the right expect the political fallout to be minimal, or even to backfire on Democrats. For other conservatives, any blowback will be worth it if it means they get to rein in a system the party has fundamentally opposed since its launch more than a decade ago.

"Democrats have to start acknowledging they blew it,” Wisconsin Republican Sen. Ron Johnson told reporters Tuesday. “Obamacare has been a huge disaster.”

With Capitol Hill mired in gridlock and lacking direction from the White House, both GOP lawmakers and outside conservative activists have compiled an arsenal of arguments for letting the Obamacare tax credits Democrats increased in 2021 return to their original levels in January.

Republicans returning to Washington on Tuesday after the Thanksgiving break insisted that a clean extension would mainly funnel money to higher-income Americans who don’t deserve the help. While the enhanced subsidies ensured nobody paid more than 8.5 percent of their income on health care, regardless of income, allowing them to expire would reinstate a cap that cut off people who earned more than four times the federal poverty level.

“We are not going to ask somebody making $20 an hour to subsidize someone making $250,000 a year,” said Sen. Rick Scott (R-Fla.) on Tuesday. “The government has caused the cost of everything to go up, and this has got to change.”

Others, including Senate Majority Leader John Thune, argue the enhanced subsidies were designed to get struggling Americans through the Covid-19 crisis and should not become a permanent program.

“They were enhancements designed to be responsive to the pandemic. They were Covid bonuses, only supposed to be temporary,” he said Tuesday morning.

Some GOP strategists, meanwhile, voiced confidence that by the time the midterms roll around, health insurance won’t be voters’ top concern, especially if the Trump administration can meaningfully lower the cost of food, gas and housing. Others argue Republicans would punish their elected leaders more for funneling money to Obamacare — which the GOP has railed against since Democrats created it in 2010 and still views as unworkable — than they would for allowing premiums to rise.

“The base of the Republican Party still yet thinks Obamacare is a swear word, so supporting it in that manner is just a bridge too far for most Republican members,” said Stan Barnes, an Arizona-based GOP strategist and former state senator. “Who wants to risk that in any kind of deep red district, or even a swing district? No one wants a primary challenge where the accusation is, ‘You supported Obamacare.”

As the stalemate continues, conservative research and advocacy groups are barnstorming Capitol Hill to convince Republicans to stand their ground, arguing that Democrats have exaggerated the impact of letting the subsidies run out for political gain.

The Paragon Institute, an influential conservative health care think tank in Washington whose leaders worked in the first Trump administration, is among the groups telling Congress that voters are being misled to believe that all insurance subsidies would expire, when in fact only the enhanced subsidies made available in 2021 would go away.

Once voters understand that the original baseline subsidies from 2010 aren’t disappearing, Paragon, Americans For Prosperity and other conservatives have claimed, they won’t mind Congress letting the increased subsidies end.

Paragon released its own polling earlier this year that found a narrow majority of voters support allowing the subsidies to expire when the question was worded to stress that distinction, while Americans for Prosperity’s poll found less than a third of respondents wanted the “higher subsidies passed during the pandemic and later extended by the Biden administration” extended.

Democrats set the subsidy expiration date at the end of this year as part of 2022’s Inflation Reduction Act to keep that law’s costs down. It passed with zero Republican votes. The Congressional Budget Office, a nonpartisan scorekeeper, said in September that extending the enhanced credits would cost nearly $350 billion through 2035.

"This is a problem that [Democrats] created, said Rep. Gary Palmer (R-Ala.), who voted for several unsuccessful bills to repeal Obamacare in 2017 and later voted against the enhanced subsidies. “They need to own it instead of trying to throw it off on us.”

The Wall Street Journal’s editorial board, a longtime bellwether for the GOP, has pointed to Republicans’ electoral victories in 2022 after the 2021 expiration of the enhanced child tax credit, another pandemic-era benefit, to argue that voters won’t punish the party now for allowing the health insurance subsidies to lapse. The child tax credits benefited many more Americans than the Obamacare subsidies.

Yet some GOP lawmakers and strategists still see danger in this approach heading into the 2026 midterms. In 2022, Republican candidates were challenging Democrats who controlled the White House, the Senate and the House. Next year, they have to defend their trifecta — a far more difficult position.

“We've got to put something together, otherwise we're all going to face blowback," Vern Buchanan (R-Fla.), the chair of the Ways and Means Committee’s health panel, told POLITICO on Tuesday.

Obamacare enrollment has grown significantly in GOP-led states since Congress boosted subsidies, particularly in places that did not expand Medicaid. Thousands of Floridians, for instance, will see higher bills if they expire.

While several Democratic governors and legislators have channeled state funding to mitigate the rate hikes, few GOP leaders have done the same. That means many GOP voters are likely to experience significant premium increases if Congress fails to reach a deal, and it’s unclear which party they will blame.

“The politics of this is what makes it messy,” said Matt Wolking, a Republican strategist who worked on Trump’s 2020 campaign. “There are plenty of ruby red Republican districts that aren't going to want to see any subsidies passed. But if you don't extend them, then you're handing Democrats a talking point that they can use in the midterms.”

Republicans are correct that people making six figures would see the sharpest increases in their health insurance premiums — with households that make more than four times the poverty level going from some help to nothing at all.

But poor and middle class families would also feel the squeeze, and are less able to weather even a small increase per month.

“These are households that are going from owing nothing each month, to owing $50 or $75 a month for their premiums at the lowest income levels,” said Adrianna McIntyre, an assistant professor of health policy and politics at Harvard University. “That could be the difference between a week's groceries and health insurance, or filling up their gas tank for two weeks.”

Premiums are set to rise by 26 percent on average next year, according to an analysis from the health research organization KFF, and the loss of the enhanced credits would mean consumers have to devote more of their income to health care costs. That means the out-of-pocket contribution from subsidized enrollees could more than double due to the loss of the boosted credits, according to KFF.

McIntyre added that another group of voters whose support Republicans don’t want to lose could also see far bigger bills next year.

“A lot of folks chose to retire early, thinking, ‘I can get some subsidized coverage on the marketplace until I qualify for Medicare,’” she said. “Those aren't necessarily people we think of as poorly off, people who have a fairly comfortable retirement. But that retirement gets a lot less comfortable if you're paying $12,000 or $15,000 a year per person for health insurance.”

A November poll by KFF found that while an overwhelming majority of the public wants Congress to extend the subsidies, there’s a sharp partisan divide.

Just 50 percent of Republicans and just 44 percent of people who identify with Trump’s MAGA movement favored extending the subsidies, marking an erosion in that support over the last few months as Trump and Republicans on Capitol Hill have painted an extension as a giveaway to fat cat insurance companies.

GOP opposition to the subsidies reared its head last week in a rare rebuke of Trump, as a backlash from lawmakers forced the White House to scuttle plans to roll out a proposal for a two-year extension.

That show of force will only fuel efforts to block proposals for an extension that could come up for a vote next week, argued Michael Cannon, a health policy expert at the libertarian CATO Institute who has spent months urging lawmakers to hold the line and let the subsidies expire.

“The political people in the White House thought they had a good read of the political situation, and it turned out they did not,” he said. “They underestimated the intensity and the breadth of the opposition.”

A GOP aide on Capitol Hill, granted anonymity to speak candidly about internal deliberations, said a major reason the party has failed to unite around a health care solution is that the political fallout of the expiring subsidies would not be shared evenly.

“The Republican conference is fairly splintered on this idea in general,” the aide said. “You have some folks from states that really need the [subsidies], who feel it's a political issue for them. But different people have different priorities, and different people's states are impacted differently by access to these plans.”

The aide added that the unresolved issue of abortion restrictions within Obamacare is further complicating matters, noting that their member represents a state that “really cares about life” and that those concerns currently outweigh pressure to avoid a subsidy expiration.

Still, Republicans based in swing states looking ahead to next year’s midterms remained concerned about the potential political ramifications, especially if Republicans fail to offer a workable health care plan that both keeps premiums from skyrocketing in the short term and goes after insurance costs more comprehensively.

Jason Cabel Roe, a Michigan-based GOP strategist, compared his party to the proverbial “dog that caught the car.”

“This is an issue we've been railing on for how many years? And now, all of a sudden, we have to deal with it, and there are no good proposals right now to get us out of this,” he said. “If we don't fix it now, we risk letting Democrats fix it later, and we're not going to like that fix.”

Cheyenne Haslett contributed reporting.