Obamacare tax credits cannot be extended without reforms | Opinion

Congress has returned from a brief Thanksgiving break to tackle a number of issues before the end of the year, including a potential extension of the Obamacare Enhanced Premium Tax Credits.

The potential lapse of these credits was the justification Senate Democrats gave for their shutdown of the federal government for over 40 days, leaving us little time to debate the issue before the end of session.

These credits, initially created as the Premium Tax Credits under the Affordable Care Act, known as Obamacare, were expanded in 2021 by the American Rescue Plan Act and renamed the “Enhanced” Premium Tax Credits to address healthcare costs for those in need during the COVID-19 pandemic. In 2022, the Enhanced Credits were extended in President Biden’s so-called Inflation Reduction Act (IRA), with an expiration date of Dec. 31, 2025, and the elimination of income caps for the credits.

Both the American Rescue Plan and IRA passed with only Democrat votes and were signed into law by a Democrat president. No Republican in Congress voted to extend these credits; we are now tasked with finding a solution that prevents major increases in healthcare premiums while reining in the abuse of federal subsidies by insurance companies.

Obamacare was marketed as the affordable option for those in need of healthcare, but it has since created one of the largest healthcare affordability crises in American history, an insurance market polluted with fraud and abuse, and taxpayer subsidized healthcare for the wealthy. These Enhanced Premium Tax Credits—which began as a temporary support system for Obamacare enrollees during the pandemic—have only served as fuel to the fire.

This is why a one- or two-year straight extension of these Enhanced Premium Tax Credits should not be on the table. If we are to be responsible stewards of taxpayer dollars, then we must make reforms that address the disaster Obamacare has created.

Last week, I co-sponsored the Fix It Act, authored by Representatives Sam Liccardo, D-CA, and Kevin Kiley, R-CA, which would extend the Enhanced Premium Tax Credits for two years with major reforms, including reinstating the income cap on who is eligible for these credits, so taxpayers are not subsidizing healthcare for the wealthy.

The Congressional Budget Office (CBO) projects this alone will save taxpayers $5 billion over the next two years. Additionally, the legislation cracks down on Medicare Advantage’s excessive payouts to insurers and addresses the inflated risks these insurers place on healthy individuals to lower premiums.

CBO projects this proposal to save up to $124 billion over the next 10 years, which will offset the cost of the legislation’s two-year extension of the credits without increasing the federal government’s deficit.

The biggest takeaway from this policy debate is just how unaffordable the so-called Affordable Care Act truly is for taxpayers. In 2010, referring to the ACA, then-Speaker Pelosi said, “We have to pass the bill so that you can find out what is in it.” What we have found is higher healthcare costs with fewer options, handouts to insurance companies on the taxpayers’ dime, and middle-class families struggling to make ends meet.

Congress must use this two-year extension to craft a comprehensive, common-sense plan that strengthens health savings accounts, reduces burdensome regulations to increase the number of health plans, and makes healthcare affordable.

-Rep. Dan Newhouse, R-Sunnyside, has represented Washington’s 4th Congressional District since 2015.

This story was originally published December 12, 2025 at 11:25 AM with the headline "Obamacare tax credits cannot be extended without reforms | Opinion."