Senate quietly works on bipartisan Obamacare fix as healthcare cliff nears

Obamacare subsidies that have dominated the conversation on Capitol Hill are set to expire after Congress failed to act, but a cohort of bipartisan senators are quietly working to find a solution for when lawmakers return next year.

It has engulfed Congress since September and played a starring role in the longest-ever government shutdown. And both Republicans and Democrats tried, and failed, to pass their partisan plans to either extend or replace the Biden-era enhanced tax credits.

They are guaranteed to expire, and millions of Americans who use the subsidies are set to experience hikes to their out-of-pocket costs for healthcare that can vary widely depending on the state.

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Still, some in Congress haven’t given up on the issue.

Sens. Susan Collins, R-Maine, and Bernie Moreno, R-Ohio, held bipartisan confabs last week as lawmakers readied to leave Washington, D.C., to hash out a framework for an Obamacare fix that could meet the desires of both sides of the aisle.

There are several political landmines that the group will have to overcome, like Democrats’ demands for a relatively clean, multiyear extension of the subsidies and Republicans’ desires to add income caps and anti-fraud measures.

“We have some momentum to enact a bipartisan bill that includes reforms,” Collins said. “As you know, Senator Moreno and I convened an ideologically diverse group of both Democratic and Republican senators who met for nearly two hours on Monday night, and we’re now working on drafting a specific bill to incorporate those conversations that will include reforms as well as the two-year extension.”

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The plan has yet to see the light of day, but Collins and Moreno both already have a public proposal, as do several other lawmakers in the upper chamber.

Their original plan, released earlier this month, would extend the subsidies by two years, put an income cap onto the subsidies for households making up to $200,000 and eliminate zero-cost premiums as a fraud preventive measure by requiring a $25 minimum monthly payment.

That initial offering could give a glimpse into the final product, but there are still hurdles to getting a bill on the floor that could pass.

Namely, Senate Republicans are largely against any kind of extension to the subsidies without major reforms and a built-in off-ramp to wean off the credits, which they say are rife with fraud and funnel money directly to insurance companies rather than patients.

There’s also another wrinkle in the House, where Democrats and a handful of Republicans rebelled to force a vote on their own extension to the subsidies. That bill is expected to get a vote next month.

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Lawmakers see it as changing the dynamic of negotiations in the Senate, but whether it ever makes it to a vote in the upper chamber is an open question.

“Well, we’ll see,” Senate Majority Leader John Thune, R-S.D., said. “We’ll obviously cross that bridge when we come to it.”

Some Republicans in the upper chamber see the momentum building in the House as a pressure point on them that could further drive the conversation around the subsidies and, more broadly, healthcare.

Sen. John Kennedy, R-La., said, “It will apply pressure on us, which isn’t a bad thing.”

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“I’m ready to start talking about healthcare at any time,” Kennedy said. “I just don’t, I mean, I’m a pragmatist. I live in the real world, and I just don’t see a lot of appetite to make reforms. I just don’t — I see the vast majority of my Democratic colleagues just want an extension of the Affordable Care Act subsidies.”

And Senate Democrats welcome the development, given that the House’s plan mirrors their own, three-year extension of the subsidies, which already failed in the upper chamber earlier this month.

“Well, it seems to me the basic proposition is, is it progress or not? And I think it is, because what we have felt all along is the only timely tool is the tax credits,” Sen. Ron Wyden, D-Ore., said.