Grassley, Ernst Back GOP HSA plan as ACA subsidy extension fails in Senate

Iowa Republican U.S. Sens. Chuck Grassley and Joni Ernst on Thursday voted to advance a GOP health care proposal built around expanded health savings accounts, positioning it as a patient-driven alternative to extending the Affordable Care Act’s enhanced premium tax credits — which are set to expire at the end of the month.

But Democrats — who rejected the measure, which required 60 votes to advance, by a vote of 51-48 — and health policy analysts warn the plan would expose families to sharply higher premiums beginning in January.

The Senate on Thursday also rejected a Democratic bill to extend the subsidies for three years, essentially guaranteeing that millions of Americans will see a steep rise in costs at the beginning of the year.

Grassley defended his vote, saying the legislation “provides real relief to a broken system” and would give patients more control over their health spending.

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“Today, Republicans put forward a health care plan that provides real relief to a broken system, and I was glad to vote for that legislation,” he said in a statement. “Our bill would have built on the success of the Working Families Tax Cuts by sending money directly to patients so they can control their own health care. In Washington, I’m going to continue leading the fight to lower health care costs through prescription drug middlemen reform, transparency and competition,” Grassley said.

He argued that Democrats are papering over what he calls the ACA’s systemic failures by pushing to extend the enhanced tax credits, which he says send billions in taxpayer dollars to high-income households and insurance companies. He contends Democrats intentionally allowed the temporary subsidies to expire to manufacture a crisis and maintains that his oversight has uncovered significant fraud and waste in the program — making an extension without reforms unacceptable.

Republicans’ proposal would have broadened who can use health savings accounts by allowing them to be paired with a wider range of lower-cost insurance plans. Supporters say the pre-funded accounts are intended to help families cover rising out-of-pocket expenses. The bill projected an 11 percent premium reduction in 2027 and beyond through restored cost-sharing reduction payments. The measure also included provisions barring federal dollars from paying for abortion or transgender services.

Grassley has pointed to his broader work on health costs — including bipartisan drug-competition bills advanced this spring and earlier efforts to increase transparency in the pharmacy benefit manager industry — as part of a long-running push to make care more affordable. He also notes that ACA subsidies for people earning less than 400 percent of the federal poverty level will remain in place in 2026, while the temporary expansion Democrats enacted in 2021 for higher-income households expires at the end of next year.

An Ernst spokesperson echoed Grassley.

“While the cost of government subsidies continues to rise, Democrats are attempting to extend the COVID-era status quo, even though it is riddled with fraud,” the spokesperson said in a statement to The Gazette. “Republicans put forth an alternative that provides real relief to a broken system and puts patients in control of their health care. Senator Ernst will continue to work to drive down health care costs and end waste, fraud, and abuse in the system.”

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Critics warn Americans would pay more for weaker coverage

Critics — including an analysis from the Center for American Progress — argue the GOP approach would leave millions of Americans paying more for weaker coverage. Their analysis says Senate Republicans’ plan relies on a patchwork of HSAs and high-deductible health plans that would shift costs onto patients, push people into low-value coverage, increase the number of uninsured and destabilize insurance markets.

The Center for American Progress analysis finds that without a clean extension of the ACA’s enhanced premium tax credits, average marketplace premiums would more than double in 2026 for the more than 20 million Americans who rely on the subsidies. It argues that Republicans’ HSA-first framework would offer only modest, one-time deposits of $1,000 to $1,500 — far short of the hundreds or thousands of dollars per month that many families could face in higher premiums once the enhanced tax credits expire.

Analysts also warn the plan would push patients into high-deductible, low-value coverage, since the assistance is tied to bronze or catastrophic plans that will carry average deductibles approaching $7,500 next year. The shift, they argue, would leave more Americans uninsured, echoing Congressional Budget Office projections that millions could lose coverage if enhanced tax credits expire. It also would destabilize insurance markets by pulling healthier consumers into bare-bones products and driving up premiums for those who remain in more comprehensive plans.

Experts further say the approach would redirect federal resources upward, offering the largest financial advantages to higher-income households while leaving lower- and middle-income families with higher costs and fewer affordable options.

Democrats warn health costs poised to rise

Democrats slammed Ernst and Grassley for voting against extending the enhanced ACA subsidies.

“Today, Senators Joni Ernst and Chuck Grassley voted against extending enhanced ACA premium tax credits that 117,890 Iowans rely on to afford their health care,” the Democratic National Committee said in a statement.

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DNC Chair Ken Martin added: “Iowans shouldn’t have to choose between food on the table, a roof over their head, or going uninsured. Democrats believe that Iowans deserve better, which is why we’ve been and will keep fighting hard to bring down costs, make health care more affordable, and extend the ACA tax credits.”

State Rep. Josh Turek, a Democratic U.S. Senate candidate from Council Bluffs, also criticized Iowa’s GOP senators.

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“Washington has once again failed working people,” Turek said in a statement. “Shame on Chuck Grassley and Joni Ernst for voting to slash funding for Iowans’ health care, and shame on Ashley Hinson, who continues to prove she has no intention of protecting Iowans’ health care or lowering costs. We need more people in Washington who understand the importance of affordable health care and the people who are worth fighting for.”

U.S. Rep. Ashley Hinson, a Republican from Marion who is running for Ernst’s Senate seat in 2026, told reporters last week she prefers legislation that promotes funding Health Savings Accounts rather than extending ACA subsidies.

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Hinson said her priority in the debate over ACA tax credits is ensuring that patients — not insurance companies — have greater control over their health care decisions. She argued that approaches modeled on Health Savings Accounts would direct assistance “into my constituents’ hands” and better protect consumer choice while avoiding subsidies for high-income households or insurers. Hinson said she expects Congress will ultimately reach a bipartisan agreement.

Democrat Nathan Sage, a former chamber of commerce leader from Indianola who is also running for the Iowa U.S. Senate seat in 2026, called Thursday’s votes, “Yet another reminder that both parties are failing Iowans and now our healthcare premiums are going to skyrocket in January.”

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Sage, posting to X, said Republicans like Hinson “propose half-baked measures and Senate Dems under Chuck Schumer bend the knee and hold meaningless votes.” He said Americans can’t afford empty gestures, “but that seems to be all we’re getting out of Washington.”

The votes this week came as both parties face pressure to avert steep premium hikes for millions of Americans heading into an election year — and as Iowa families brace for the possibility of significant changes to their health coverage beginning in 2026.

Comments: (319) 398-8499; tom.barton@thegazette.com