Dems open to income cap on ACA subsidies
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Cortez Masto. Photo: Anna Moneymaker/Getty Images
Some moderate Senate Democrats say they are open to placing an income cap on eligibility for Affordable Care Act tax credits to help facilitate a deal with Republicans.
Why it matters: The way high earners can tap ACA tax credits is helping drive Republican resistance to renewing the subsidies. An income cap is almost essential to a potential deal, whether as part of negotiations to reopen the government or as part of a health care package later this year.
What they're saying: "Do I think we could put a cap on who benefits from the tax credits? Yes," Sen. Jeanne Shaheen (D-N.H.) told Axios on Wednesday, saying that the exact level of any income cap is "subject to negotiation."
- "I've always been supportive of means testing federal programs at the top end," said Sen. Tim Kaine (D-Va.).
- But he, like other Democrats, said the problem is that Republicans are not engaging in serious negotiations at this point.
- Republicans counter that Democrats need to agree to reopen the government before any substantive talks can begin.
- "Working together like we are supposed to in a bipartisan way, yes we can get there, but we have to have those conversations," said Sen. Catherine Cortez-Masto (D-Nev.), when asked about income limits.
Between the lines: The enhanced subsidies that help roughly 22 million ACA enrollees afford their premiums are due to expire at the end of the year unless Congress acts. The assistance was previously capped at 400% of the federal poverty level, or $62,000 for an individual, but Democrats removed that cap when they made the subsidies more generous in 2021.
- Cutting off access for higher earners alone is unlikely to be enough for the Republicans.
- GOP lawmakers have also pointed to measures such as requiring recipients to make a minimum premium payment, thereby ending $0 premium plans they say fuel fraud.
- A split over whether to add language blocking any subsidies from being used to fund abortions is also a major complication for any potential talks.
- Many Republicans, particularly in the House, don't want to extend the enhanced tax credits under any conditions, saying they are costly and were meant to be a temporary COVID-era measure.
The bottom line: Sen. Mike Rounds (R-S.D.), one of the Republicans more open to some form of ACA subsidy extension, said the message to Democrats is: "End the shutdown, and you can at least have discussions, but they're not going to be easy."
