On December 11, the voting begins in the Senate on a Democratic proposal to extend the COVID-era enhancements to the premium tax credit (PTC) under the Affordable Care Act (ACA). Absent action, the PTC enhancements will expire in a few weeks, putting pressure on Congress to act.
 
Democrats intend to put forward a straight, three-year extension of the enhanced PTC provisions. Senate Republicans generally oppose extending the enhanced PTC, arguing the credit does nothing to address underlying problems with the ACA that are driving costs up faster than inflation. But a GOP consensus remains elusive on what policy changes are warranted. 

Here's some potential options under consideration by various GOP factions in the Senate and House: 

• Any proposal offered by Senate Republicans needs the blessing of Senate Majority Leader John Thune (R-SD) and Finance Committee Chairman Mike Crapo (R-ID). Both senators have been keeping their cards close, but Chairman Crapo did outline some policy changes at a hearing last month, including expanding health savings accounts (HSAs) and the medical expense deduction, and reforming the pricing rules for pharmacy benefit managers (PBMs). Leader Thune talked up support for allowing individuals to opt into a type of "association" health coverage that crosses state lines. 
• Senator Bill Cassidy (R-LA) continues to make the case for a plan to redirect the PTC revenue subsidy to "Pre-Funded Flexible Spending Accounts," a type of HSA, to offset consumer premiums or other health costs. President Trump endorsed the concept in early November.
• Senator Josh Hawley (R-MO) indicated that he can support an extension of the bonus PTC. At the same time, he has been crafting legislation that would allow certain taxpayers to deduct up to $25,000 in medical expenses.
• Representatives Jen Kiggans (R-VA) and Josh Gottheimer (D-NJ) propose a one-year PTC extension with new income restrictions on eligibility and an extended open enrollment period until March 19, 2026. House GOP leaders dismissed the plan, but supporters note it has the bipartisan backing of at least 35 House lawmakers. GOP leaders say they are developing a healthcare proposal for potential consideration at some point this year. The House plan is expected to include a collection of GOP proposals, including PBM and HSA reforms, and could be released this week.

The conventional wisdom is that any healthcare option up for debate in the Senate on Thursday will fall short of the 60-vote threshold needed to advance. What's clear is that any solution offered will need bipartisan support to pass Congress and political cover from the president for Republicans to proceed. So far, the White House has let GOP congressional leaders take the lead on a possible solution, but a failed vote this week could hasten more involvement from the president. 

This Thursday probably won't be the last showdown on the PTC. There are still three weeks to go before the year ends and another opportunity for action when the current continuing resolution expires at the end of January. #TaxTake

Upcoming Speaking Engagements and Events

Mike will speak at the IFA 6th Annual International Virtual Tax Conference on December 11.

Mike and Katherine Jordan will speak at the ABA 2025 Criminal Tax Fraud and Tax Controversy Conference on December 12-13.

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