Sen. Thom Tillis sees a path to working with Democrats on extending enhanced ACA marketplace subsidies once the reconciliation process is done, he told Victoria this week.

Why it matters: Sen. Lisa Murkowski had until now been the only GOP senator to publicly express support for extending ACA subsidies that expire at the end of the year.

What they're saying: "I've talked to my Republican colleagues. They agree," said Tillis, who is on the Senate Finance Committee. "There's a case to be made for trying to figure out how we can continue the subsidies, but then have a broader discussion.

• "We talked about child tax credit, other maybe Democrat priorities that I think could make its way into a bipartisan bill, but we've got to figure out … this [reconciliation] bill first," he said.
• "I think it can be outside reconciliation. And I believe it only makes sense after we have a greater understanding of what is in the reconciliation package.… But [the subsidy extension] is going to have to be offset. We'll just have to work on that."

By the numbers: ACA marketplace enrollment in Tillis' state of North Carolina surged 118% from 2020 through 2024, per KFF, and about 96% of enrollees got an advanced premium tax credit to help them pay their premiums.

State of play: Murkowski said in January that she thought Congress needs to extend the credits.

• "I think [expiration of the credits] has the potential to move us backwards, in terms of the progress that we have made in improving access to health care and affordability," Murkowski said in the interview.

The other side: Senate Finance Ranking Member Ron Wyden told Victoria that although his immediate priority is reviving the health package that was dropped from the year-end funding deal, he could be open to working with Republicans later on extending the ACA subsidies.

• "I say work with anybody who wants to get things done that are good," he said.

Between the lines: Tillis is up for reelection next year and could face a tough race in a purple state. Former Democratic Gov. Roy Cooper is reportedly weighing a challenge.

• Tillis already has at least one primary challenger: Andy Nilsson, a businessman and former candidate for North Carolina lieutenant governor.
• Nilsson's campaign appears to be running to the right of Tillis, saying that the senator couldn't be relied on "to fully support Trump's America-first agenda."

The big picture: KFF recently estimated that 8% to 12% of each congressional district in the state is enrolled in the ACA marketplace.

• If the enhanced subsidies expire, the premium for a benchmark silver plan for a 60-year-old couple making $82,000 would at least double in the vast majority of those districts, KFF found.

Yes, but: The cost of renewing the subsidies could be prohibitively expensive. The CBO has estimated that permanent subsidies would cost $335 billion over 10 years.

Chairs of key congressional committees that oversee HHS said they were not briefed ahead of time on the major layoffs and reorganization of the department announced today and were still gathering details.

Why it matters: Although HHS Secretary Robert F. Kennedy Jr. billed the closely guarded effort as a streamlining to increase efficiency, there may be wide-ranging effects at agencies including the FDA, which could lose 3,500 employees, and the CDC, which could lose 2,400, Peter and Victoria report.

• Combined with early retirement offers, the moves are expected to reduce the health department from 82,000 to 62,000 full-time employees.

What they're saying: "I haven't seen it yet," House Appropriations Chair Tom Cole said of the layoff and restructuring plan, adding "I'm sure I'll have thoughts on it" once he reviews it.

• "I just heard they were going to make an announcement this morning around 9, but I've not seen any of the details," said Rep. Robert Aderholt, who chairs the Appropriations Labor-HHS subcommittee.
• Aderholt said he wants to see how the cuts affect various agencies, adding that his understanding was that NIH was not really affected.
• House Energy and Commerce Chair Brett Guthrie likewise told Stat he was not briefed ahead of time.

Wyden assailed the cuts, saying they would affect offices that work to ensure child care, hospitals, and nursing homes are safe and that strengthen rural health care.

• "The chaos that is coming will guarantee that kids and seniors fall through the cracks with deadly consequences," he said.
• "It does not take a genius to understand that pushing out 20,000 workers at our preeminent health agencies won't make Americans healthier," said Patty Murray, the top Democrat on the Senate Appropriations Committee.

But Speaker Mike Johnson praised the moves, saying HHS was one of the most bloated federal bureaucracies.

• "@SecKennedy is bringing new, much-needed ideas to the department by returning HHS to its core mission while maintaining the critical programs it provides Americans," Johnson wrote on X.

1. Tariff tension: Medical device makers, hospitals and other key health players are lobbying for exemptions from forthcoming Trump duties on imported goods, Adriel Bettelheim and Tina Reed report.
2. Canceled grants: The Trump administration is ending billions of dollars in funding to state and local health departments, Maya Goldman and Sabrina Moreno report.
3. Hospitals' challenges: Not-for-profit hospitals' financial results improved last year but could be tested by federal budget cuts that lower Medicaid reimbursements and increase uncompensated care, Fitch Ratings wrote in a note.