With enhanced Affordable Care Act subsidies set to expire Dec. 31, Congress is entering a sprint toward the next government funding deadline on Jan. 30. President Trump briefly signaled openness to an extension, but GOP resistance has stalled momentum. For hospitals and health systems, the outcome will directly shape coverage levels, payer mix and uncompensated care risk in 2026.
The most probable outcome is that a clean extension fails in the Senate because Democrats cannot secure the 13 Republican votes needed. Any GOP alternative is also unlikely to reach 60 votes. If both fail, the enhanced subsidies lapse on Dec. 31. CBO estimates that expiration would raise average marketplace premiums by hundreds of dollars annually, with KFF modeling pointing to sharp coverage losses in rural and low-income communities. There is likely appetite in the Senate for a bipartisan bill that temporarily extends the subsidies, but that is unlikely to fail in the House as Republicans there don’t want to extend the subsidies.
If premium hikes hit consumers immediately, political pressure could force Republicans back to the table ahead of the Jan. 30 funding deadline. A revived package might include additional health policy measures, such as PBM reforms. Congress could also authorize a special enrollment period. Negotiations would still be complicated by GOP demands around abortion coverage restrictions.
A December agreement is still possible if President Trump decides to push for one. His earlier trial balloon included a conditional extension, suggesting some flexibility. The window is short and GOP leaders remain skeptical. This might allow for Republicans to attempt a partisan reconciliation bill in 2026. The process would be lengthy and politically risky, and there is no consensus yet on what a GOP-only plan would include.
However! Never say never. A bipartisan proposal *could* pass both parties in a last minute deal in both houses. President Trump has simultaneously been complaining about the subsidies on Truth Social while also hinting at extending the subsidies with certain conditions. It could happen!
What leaders should watch
If subsidies lapse, hospitals will face increased uncompensated care, reduced marketplace enrollment and higher financial strain in early 2026. Rural systems are at particular risk. What should health system leaders do?
• Prepare for a potential rise in uninsured and underinsured patients beginning in January.
• Communicate directly with congressional offices about the financial impact of subsidy loss.
• Track any January negotiations, particularly proposals tied to PBM reform or payment models.
• Coordinate with state insurance officials to understand rate implications if subsidies expire.
Stay tuned!