Congress leaves Washington without a healthcare deal as subsidy deadlines and FY2026 funding fight loom

Members of Congress left Washington for the winter break without an agreement on expiring health insurance subsidies or a longer-term federal spending plan, pushing both fights into the new year. According to Fox News, lawmakers face a Jan. 30 deadline to fund the government for fiscal year 2026, and the House and Senate are scheduled to be in session together for only eight days before that date.

The unfinished business follows the longest funding lapse in the country’s history. NPR reported that the shutdown ended after 43 days when lawmakers agreed to reopen federal agencies, an arrangement that set the current late-January funding cliff.

The subsidy fight

At the center of the dispute are the enhanced premium tax credits for Affordable Care Act coverage. Harvard Kennedy School associate professor Mark Shepard told the Harvard Kennedy School that the enhanced subsidies have been in place since 2021 and that, absent congressional action, they would expire at the end of the year and raise out-of-pocket premiums for about 20 million Americans in January 2026. He said Democrats had demanded an extension as a condition of funding the government, producing the impasse.

KFF estimated that if Congress did not extend the credits, the average marketplace enrollee’s premium payment would more than double in 2026, rising 114 percent from an average of $888 in 2025 to $1,904.

The credits lapsed on Dec. 31. Healthcare Dive reported that roughly 4 million Americans are expected to lose insurance as a result of the expiration, and that hospitals and doctors could lose more than $32 billion in revenue over the year, according to published estimates.

The enhanced credits were first enacted in 2021 during the coronavirus pandemic and were extended under the 2022 Inflation Reduction Act. Healthcare Dive reported that the policies made ACA plans more affordable for middle-income households and generally free for many low-income enrollees, and that they were credited with driving record sign-ups on the exchanges before their scheduled sunset at the end of 2025.

A divided Congress

Republicans have resisted a straight extension. Healthcare Dive reported that President Donald Trump and many in the GOP describe the assistance as a handout to insurance companies and a driver of fraud in the exchanges, and that some members cite the cost. The Congressional Budget Office estimated a three-year extension would cost about $81 billion over a decade.

After the recess, the House acted on the issue. Healthcare Dive reported that the chamber voted 230 to 196 to extend the expired subsidies for three years, with 17 Republicans joining Democrats. The measure reached the floor through a discharge petition that advanced against the wishes of Speaker Mike Johnson, R-La. The outlet reported that the bill was expected to stall in the Senate, where a similar measure had failed in December.

Healthcare Dive also reported that some moderate senators were working on a compromise proposal, and that polling has shown the assistance to be popular with the public, a dynamic some analysts tied to the coming midterm elections. In its interview, the Harvard Kennedy School noted that the subsidy cliff was widely known in advance and that Congress had opportunities to address it earlier in the year.

The funding deadline remains the more immediate pressure point. Fox News reported that without a new agreement by Jan. 30, federal agencies would again face a lapse in appropriations, and that the compressed floor schedule leaves lawmakers limited time to negotiate a fiscal year 2026 spending package after returning to Washington.