Republicans Debate Extension of Biden’s Enhanced Obamacare Tax Credits

Nearly a decade after Donald Trump first became president vowing to repeal and replace it, Obamacare is once again becoming one of Congress’ most high-stakes debates.

At the end of 2025, enhanced premium tax credits for former President Barack Obama’s signature Affordable Care Act are set to expire.

Those enhanced credits were introduced during President Joe Biden’s administration under the American Rescue Plan Act to subsidize the cost of health care premiums as a response to the COVID-19 pandemic and then were further extended, and set to expire at the end of 2025 by Biden’s Inflation Reduction Act.

The Democrat legislation expanded the reach of the health care tax credit to higher earners, while also boosting the savings it provided.

Now, Republicans have to decide whether or not to extend the enhanced credit. But there’s some historical reason for treading with caution around health care issues. In the 2018 midterms, Republicans lost control of the House following an attempt to repeal Obamacare.

Senate Majority Leader John Thune, R-S.D., has expressed openness to the discussion, saying Thursday that “the Democrats created this problem by putting the deadline or the phaseouts in the legislation they acted on earlier, and by dramatically expanding the size of the program in the first place,” but added: 

I hope they [Democrats] will come to us with a suggestion and a solution about how to address it. But obviously, it’s something that, yeah, some of our members are paying attention to.

In the House of Representatives, a group of swing-district Republicans have joined with Democrats in introducing a bill to extend the subsidies beyond the midterms.

“Congress needs to develop a responsible, sustainable plan before these COVID credits expire,” said Rep. Jen Kiggans, R-Va., who introduced the bill alongside Rep. Tom Suozzi, D-N.Y. “Raising costs for families with little notice, and potentially stripping them of access to care, is simply unacceptable.”

The bill has several Republican sponsors, but that’s not to say that all Republicans are excited about the idea of extending a Biden-era policy.

“Look, the bottom line is that if the Democrats wanted them to last forever, they should have put that in the bill,” House Freedom Caucus Chairman Andy Harris, R-Md., told The Daily Signal. “The Inflation Reduction Act extended COVID-era enhanced subsidies until the end of 2025. COVID is over. The Democrats’ law is going to expire, and I think it should expire. It’s too expensive to renew.”

Harris added, “All this does is return us to the pre-COVID level of subsidies. Well, that’s the level that was passed by the Democrats. They should be happy with that in the Obamacare bill. But it’s at a cost of over $40 billion a year. If someone wants to propose how we pay for it, I might consider supporting it, but no one’s proposing how to pay for it.”

Rep. Scott Perry, R-Pa., also a member of the House Freedom Caucus, told The Daily Signal he’d be happy to see the subsidies phase out.

“No Republican voted for Obamacare. Free health care is now the most expensive health care that you can’t afford. In our country, people are waiting in lines, and they can’t afford it. It’s either the No. 1 or the No. 2 bill in their household on a monthly basis,” said Perry. “I think we can say with a fair amount of accuracy that it has been a historic failure. And so Republicans should not support the continuation of that in any way.”

Speaker of the House Mike Johnson, R-La., feels pressure from both sides of the issue within his conference as he seeks to maintain the Republican majority in the House and satisfy an ideologically diverse Republican conference.

“I don’t love the policy, OK? But I understand the political realities and the realities of people on the ground. And this is real to folks,” Johnson said in a recent interview with Punchbowl News, adding:

“I don’t think the policy is great. I don’t think we should be subsidizing high-income earners. It was a COVID-era issue, and so that would be a big thing for the Republican Party to continue or advance that. At the same time, we don’t want anyone to be adversely affected by that.”