Health insurers rise after the Senate rejects competing healthcare plans
The Democratic plan would have extended tax credits, while the GOP plan would have replaced them with HSAs.
The US Senate rejected two competing healthcare plans as insurance premiums are set to skyrocket and the Biden-era enhanced Affordable Care Act tax credits are set to expire at year-end.
A Democratic proposal to extend the tax credits — which were at the center of the longest government shutdown in history — failed, as did the Republican plan, which would have allowed ACA subsidies to lapse and partially replace them with federally funded tax-advantaged health savings accounts.
The biggest providers of ACA Marketplace plans like Oscar Health, UnitedHealthcare, Molina Healthcare, Elevance Health, and Centene rose after the vote. While the potential end of the ACA subsidies would hurt their bottom lines, investors have had time to price that in, while the Senate GOP plan to replace that funding with HSA contributions presented a new threat.
The ACA tax credits, which subsidize health insurance plans provided by private insurers, were part of a 2021 COVID-19 relief package passed by a Democratic-controlled Congress. The subsidies, which are set to expire on December 31, led to a boom in ACA enrollment.
The tax credits are set to end just as ACA Marketplace premium payments are expected to double next year, according to an estimate from KFF.
