With the U.S. Senate anticipating another vote on whether to extend Affordable Care Act tax credits, Alabama’s senators will again have a chance to weigh in on Congress’s ongoing healthcare affordability debate.
Enhanced premium tax credits, or ePTCs, were established by the American Rescue Plan Act in 2021 and extended through the end of 2025 by legislation passed in 2022.
Following the Senate’s vote not to extend the subsidies in December, the House was able to pass a bill in early January to extend the credits for three years, with 17 Republican representatives voting in favor of the legislation.
The bill is expected to see a vote in the Senate by the end of January, with senators undertaking negotiations to reach a bipartisan compromise aimed at lowering healthcare costs.
Alabama’s congressional delegation has largely split along party lines regarding extension, with the state’s two U.S. House Democrats voting in favor of extension in December, and all Republican congressmen voting against it. Republican lawmakers have instead backed alternative plans for addressing healthcare affordability and called for broader reforms to the ACA.
U.S. Representative Robert Aderholt, R-Ala., and U.S. Rep. Gary Palmer, R-Ala., have both endorsed plans for health savings accounts and establishing an alternate healthcare marketplace proposed in a reconciliation package framework announced by House Republicans on January 13.
The proposal would reform ePTCs’ structure to grant individual enrollees funds directly through “Health Freedom Accounts,” alongside expanding access to health savings account options and establishing a “parallel” marketplace to the ACA’s where Americans may shop for healthcare plans.
U.S. Representative Terri Sewell, D-Ala., and U.S. Rep. Shomari Figures, D-Ala., meanwhile, have demanded the Senate adopt the House’s bill to restore the credits outright.
Although Alabama’s Senate Republicans voted against extending subsidies last December, the vote comes as more Republican senators are seeking bipartisan support for competing solutions aimed at addressing healthcare costs.
During an interview ahead of the Senate vote, Center for American Progress, CAP, Health Policy Director Natasha Murphy expressed disappointment in Congress’s failure to address the upcoming expiration of credits last year and hopes that a bipartisan solution, which includes extension, will be developed by the Senate.
CAP is a progressive public policy research nonprofit, where Murphy develops and advocates for policy proposals aimed at advancing healthcare access and affordability.
“For well over a year, particularly, Republicans were pushing back on the notion, saying, ‘Oh, we have other priorities. This can be dealt with at a later date,’” she said. “There was no action over the summer, and then, you know, no action during the fall. And here we find ourselves at the start of 2026, and technically, the tax credits have already expired.”
Murphy, however, said she feels it is unlikely enough Senate Republicans will rally around the House legislation, and questioned the efficacy of healthcare proposals aimed at keeping costs down that do not include extension.
“At this point, there does not seem to be much appetite for that proposal. I know right now there are a subset of senators who are exploring other options,” Murphy said.
“Those types of policy changes could have been explored months ago, but where we are at this point, with so many Americans, you know, facing unaffordable coverage and coverage loss, the time really is now to pass something that’s simple and clean and restores that premium affordability,” she added.
When asked to describe the importance of extension to Alabama and her message to Alabama’s Senate delegation, Murphy urged the state’s senators to vote in favor of the extension, citing the negative impacts on the state’s healthcare system should its uninsured population grow significantly.
“You’re going to see increases in the number of uninsured residents, and particularly for a state that you know has a decent number of rural areas and rural hospitals,” Murphy said. “As folks go uninsured, you’re going to see uncompensated care costs rise, and that’s going to have, you know, a pretty, pretty significant impact on rural facilities, many of which are already struggling financially.”
Roughly 130,000 Alabamians are estimated to have their coverage put at risk by premium increases caused by the expiration of the credits.
Healthcare nonprofit, the Kaiser Family Foundation, KFF, has projected that the lapse of ACA tax credits will cause insurance rates to more than double for subsidized plan recipients, who make up more than 90 percent of Alabama’s 477,000 ACA Healthcare Marketplace users.
In Alabama, KFF has reported that the end of the credits will increase average ACA premiums by 93 percent for subsidized recipients. 2026 premium costs for ACA plans as a whole have been increased by insurers by an average of 26 percent.
Cover Alabama Campaign Director Debbie Smith, whose organization has advocated for ACA subsidy extension, said that with the end of open enrollment, Alabamians are beginning to see the impacts of ePTC expiration, with higher premiums and some no longer being able to afford ACA coverage.
“People need it. People are really struggling, and this is a simple solution to make sure that people can afford their health insurance,” Smith said. “We don’t have to dive into deep debates about health savings accounts and parallel markets right now. This is the solution that’s at our grasp, like in our hands right now, to make things affordable for Alabamians.”
Smith argued Congress’s failure to achieve a vote on extension stems largely from reluctance from Republicans to endorse the Affordable Care Act because of its association with Democrats and the Obama administration.
“I think if it didn’t have the name Obamacare on it, no doubt this would be sailing through, right? Let’s just be real,” Smith said. “It’s more the origin of where those tax credits and where this plan came from than it is the plan itself.”
Despite lacking wide bipartisan support and the passage of the 2026 open enrollment period, Smith said her organization will continue to advocate for extension.
“We’re absolutely not going to give up on this—we’re going to continue to advocate for the tax credits to be extended. We’re going to continue to advocate to close the health insurance gap in Alabama,” she said. “These problems are not going away, so we’re not going away either.”
While the plan to revive ACA subsidies for three years has seen limited public support from Senate Republicans, a small bipartisan group of senators has faced setbacks in negotiating a deal to ensure extension.
Calls to extend ePTCs must vie for Republican support amid competing proposals from the Trump administration and Republican Study Committee to push legislation establishing health savings accounts and high-deductible plans.
Republican lawmakers have also claimed the tax credits benefit insurance companies more than consumers and are vulnerable to fraud. Murphy, meanwhile, argued that ePTCs remain the most effective way to improve coverage for low-and middle-income Americans.
“The federal government is paying a portion of these individuals’ premiums, and yes, that does go to insurance companies,” she said.
She emphasized, however, that payments benefit individual enrollees, alongside healthcare systems, by ensuring enrollees can afford their premiums and lessening the financial burden of uncompensated care on medical providers.
“That lifeline, affordability lifeline, is what has contributed to the coverage gains, and it really does need to be preserved at a time when health care costs, more broadly, are rising,” she added.
The policy director described alternatives presented by Republicans, such as health savings accounts and high-deductible plans, as inadequate to fill the void left by the expiration of enhanced credits.
Health savings accounts, Murphy said, “inherently would not benefit the population who is going to be most harmed by the loss of the enhanced tax credits.”
“Someone who is lower-income or more middle-income likely does not have the disposable resources to contribute to an HSA in a meaningful way, and then really the high-deductible health plans are just disastrous,” she said. “The fact that, yes, you are exchanging lower premiums, but you are really getting slammed by these exceptionally unaffordable deductibles, and they were really kind of only fit, or are only appealing to folks who are younger and healthier.”
U.S. Senator Katie Britt, R-Ala., and U.S. Sen. Tommy Tuberville, R-Ala., both supported Republican health savings account legislation, instead of a Senate bill to extend ACA credits.
Both senators have conditioned their support for extension on the implementation of new fraud protections and income caps on eligibility.
