What Congressional proposals exist in 2026 to restore or replace the enhanced ACA premium tax credits?
Executive summary
Congressional proposals in 2026 to restore or replace the ACA’s enhanced premium tax credits fall into three broad buckets: Democratic-led near-term extensions that would reinstate the enhanced credits for multiple years, Republican alternatives that would replace direct premium subsidies with account-style or limited short-term fixes, and hybrid or bipartisan negotiation drafts that tweak eligibility and program integrity while trimming cost — all of which remain politically contested as lawmakers weigh steep budgetary and market impacts [1] [2] [3] [4].
1. Democratic short-term extensions: bills to simply extend the enhanced credits
Democrats have put forward straightforward extension bills that would reinstate the enhanced premium tax credits for multi-year periods, including a three-year Schumer-led proposal (the Lower Health Care Costs Act referenced in floor discussions) and standalone Democratic bills that passed the House in various forms; Representative Fitzpatrick also offered a plan to extend credits through 2027, reflecting the Democratic strategy of preserving the ARPA-era enhancements rather than redesigning them [1] [5] [3].
2. Republican alternatives: HSAs, Exchange FSAs and account-based substitutes
Several Republican proposals aim to replace or repackage the value of enhanced credits into spending-account models rather than continuing the advance premium tax credit mechanism — Senator Bill Cassidy pitched “Exchange FSAs” that would prefund flexible spending accounts to cover health costs equal to the enhanced credit value, arguing it offers more consumer flexibility, while the Health Care Freedom for Patients Act would fund temporary HSA-style accounts and make other structural changes instead of extending enhanced subsidies [2] [1].
3. Bipartisan and hybrid fixes on the table: caps, audits and targeted extensions
A range of hybrid proposals has circulated that would extend subsidies only partially or pair extensions with integrity measures: bipartisan lawmakers have floated two-year extensions capped at certain income thresholds (e.g., Liccardo–Kiley Fix It Act with a six-times-poverty cap), and policy briefs and legislative drafts include provisions for more frequent marketplace audits, advance-notification of credits to consumers, and extended open enrollment windows as conditions of any deal [2] [6] [7].
4. Procedural posture and the politics shaping which proposals advance
Legislative momentum has been fractured — the House has seen both Republican-led legislation that omits enhanced credits and pressure campaigns (discharge petitions) to force votes on Democratic extensions, while the Senate has rejected straight three-year extensions and continued informal bipartisan talks; Senate leaders have at times suggested using House-passed vehicles as negotiation “vehicles,” but no consensus had emerged as 2026 began [3] [8] [1].
5. Budget, market and stakeholder pressures that drive the proposals
Fiscal calculations from the CBO and budget groups inform every proposal: a full permanent extension carries substantial ten-year costs, with CBO and JCT estimating billions in added outlays from the ARPA-era changes and CRFB and BPC analyses warning of a roughly 7–18% premium effect on benchmark plans if policy shifts; advocates emphasize the coverage and affordability gains of enhanced credits, while fiscal conservatives point to deficit impacts and urge market-based alternatives, framing both the political calculus and policy tradeoffs shaping draft legislation [9] [4] [7] [10].
6. What to watch in 2026: key votes, White House signals, and design tradeoffs
The next inflection points are clear: whether a House discharge petition or floor maneuver forces a binding vote on a Democratic extension, whether the Senate coalesces around a GOP account-style alternative or a narrow bipartisan compromise, and whether the White House embraces short-term extension language to buy negotiation time — each outcome will hinge on visible tradeoffs (cost, eligibility, program integrity) embedded in competing bills and on the political appetite to accept either a straight extension, a capped or time-limited fix, or a replacement through FSAs/HSAs [8] [3] [6].