Senate votes on ACA fail, threatening a rise in healthcare costs for everyone

By Jaimy Lee

Republican and Democratic lawmakers could not advance a pair of stopgap plans in the Senate that would address the expiring Obamacare subsidies

Senate Minority Leader Chuck Schumer and Sen. Cory Booker, shown here in October, look at a poster depicting rising ACA premiums for 2026.

A pair of stopgap plans crafted to address expiring Obamacare subsidies failed in the Senate on Thursday, increasing the likelihood that millions of people in the U.S. will either go without health insurance next year or downgrade their coverage - leading to higher healthcare costs for most Americans.

The premiums for Affordable Care Act marketplace plans are going up by 114% on average in 2026 for two reasons: The enhanced tax credits that made those plans far more affordable expire Jan. 1, and health insurers pre-emptively raised rates with the expectation that millions of healthier, younger adults will opt out of coverage altogether as a result of the far more expensive monthly premiums.

"It quite plainly means less coverage," said Jonathan Oberlander, professor of health policy and management at the University of North Carolina at Chapel Hill. "It's not the holiday gift that most Americans are looking for, but you're talking about - in the midst of an economy that's experiencing substantial affordability challenges - on average doubling people's premium payments in the marketplace."

Premiums are not the only cost that is increasing. Deductibles are also going up, with some individuals taking on ones of $11,000 or even higher. The Urban Institute predicts that 4.8 million people who had an ACA marketplace plan in 2025 will be uninsured in 2026, the logic being if you're relatively healthy, why pay for a plan that costs many hundreds of dollars per month and has a $10,000 deductible?

But for the system as a whole, accounting for more uninsured people will have a ripple effect. If some 4.8 million people are forced to go without health insurance, it would end the steady decline in the rate of uninsured people since 2011, when the ACA went into effect. It also means that healthcare costs will likely go up across the board, even for people who get their health insurance through an employer.

Health insurance costs are already rising - including for people with employer plans and for Medicare beneficiaries - driven by higher spending on prescription drugs like GLP-1s, providers charging higher prices for medical care and less competition among hospitals.

"Even though the impacts of the premium increases are confined to this one population of ACA enrollees, the effects on the health system will impact everybody at some point," said Emma Wager, senior policy analyst for KFF's Program on the ACA.

When people are uninsured, they often skip basic medical care like getting checkups and filling prescriptions, but they're more likely to end up in an emergency room or hospital, which won't be paid to care for them. Those providers will eventually raise their rates, affecting everyone who interacts with that health system.

Hospitals are already preparing for an influx of uninsured patients. New York City Health + Hospitals, a regional network of hospitals and nursing homes, may "revisit its cost-cutting plans" as it prepares for a "growing uninsured population." It expects 150,000 people will lose coverage in its Essential Plan next year.

At an investor conference last month, Steve Filton, chief financial officer at Universal Health Services (UHS), said the publicly traded hospital company is anticipating a $100 million headwind as a result of the subsidies expiring. About 6% of the company's acute-care admissions are people with marketplace plans, which tend to have high deductibles and cost-sharing.

"We assume that they'll continue to use the emergency room and emergency procedures at the same rate, in the same cadence," he said. "But now we won't get paid for them."

People have several choices. Some may qualify for Medicaid, while others might downgrade their plans to a different tier with higher deductibles and cost-sharing or change jobs to get health insurance through an employer. Those younger than 30 can switch to a cheaper catastrophic plan. But the risks remain.

"If you happen to have a low-probability, high-cost expense, you could easily end up with bankruptcy or obviously a lot of financial pressures," said Kathleen Adams, a health economist and professor of public health at Emory University.

The majority of people in the U.S. have had health insurance coverage in recent years, largely driven by the 2021 tax credits, which led to record participation in the marketplace. About 24.3 million people had an Obamacare plan in 2025, up from 11.4 million in 2020, according to KFF - and about 22 million benefited from the subsidies. But the Affordable Care Act, President Barack Obama's signature legislation, has long been a target for Republicans, who argue the system it created was overly reliant on increasing federal subsidies and that it sparked an explosion in healthcare costs. The question of whether to renew federal subsidies was a sticking point in the government shutdown earlier this year.

Democrats were attempting to pass a bill extending the tax credits for three years, while a last-minute Republican proposal offered to put between $1,000 and $1,500 into health savings accounts for certain people with marketplace plans who earn less than 700% of the federal poverty line, in order to offset the increasing cost of premiums.

Two separate plans brought by Republicans and Democrats in the Senate each received 51 votes. The plans needed 60 votes to pass. The failure of the Senate votes may make the future of the ACA a key issue in next year's midterm elections.

"Because of the way the pricing for plans works, the folks who are going to get hit the hardest are older, higher-income people," Oberlander said, "and that may not be a constituency you want to alienate before congressional midterm elections."

For now, the people who are deciding whether to skip health insurance next year or downgrade their plans to be more cost-effective have four days to enroll in a plan that starts Jan. 1. They can also wait until Jan. 15 to enroll in plans that start Feb. 1.

-Jaimy Lee

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12-12-25 0830ET