By Lindsay Wise, Siobhan Hughes and Anna Wilde Mathews

WASHINGTON -- Senate Republican negotiators say they are closing in on a deal with Democrats to extend and overhaul the federal health-insurance subsidies that expired at the end of last year, though language related to abortion coverage remains a major sticking point.

The emerging framework would extend the expired enhanced Affordable Care Act subsidies for two years, while adding income caps, antifraud measures and other provisions designed to draw GOP support. The legislation would require 60 votes to clear the Senate, where Republicans have a 53-47 majority, and would also need to be approved by the GOP-controlled House.

Sen. Bernie Moreno (R., Ohio), who is leading talks along with Sen. Susan Collins (R., Maine), said senators are close to finalizing a framework and could release the text of the bill by Monday. He said his goal was to craft a measure that could draw support from more than half of Senate Republicans.

"We're in the red zone," he said, though he cautioned that doesn't mean it is a done deal. Collins echoed Moreno's optimism, saying that senators "are close to coming up with a proposal that would be bipartisan."

Republicans have for years opposed the enhanced ACA subsidies, which were first passed into law in 2021 by Democrats and expired at the end of last year. But with insurance costs rising sharply for millions of Americans ahead of the midterm elections this fall, some Republican lawmakers have pushed for a short-term deal with Democrats to buy time for more comprehensive changes.

Sen. Jeanne Shaheen (D., N.H.), a lead Democratic negotiator, didn't offer details on the talks but told reporters: "We should have a draft ready soon."

The talks are picking up as the House is set to hold a vote on a three-year extension of enhanced ACA subsidies on Thursday, after four centrist Republicans crossed party lines to back the Democratic effort over the objections of House Speaker Mike Johnson (R., La.). An identical bill failed to advance in the Senate last month, but the Senate could take up the measure and amend it this time.

Senate negotiators will meet on Thursday with House members eager for a compromise. Rep. Mike Lawler (R., N.Y.) said that with various groups circling around a plan to narrow the subsidies and extend them for two years, "I think that's ultimately where we can get."

Other Republicans were cautious about the prospects for a deal. Senate Majority Leader John Thune (R., S.D.) said that there had been productive conversations between Republicans and Democrats but there remained sticking points, including the question of whether to add further restrictions on ACA plans' coverage of abortion services.

"They're working hard trying to find something that threads those various needles, but as of right now," Thune said, "I'm not aware at least that there's a landing spot just yet."

Johnson also has pointed to abortion language as a hangup for Republicans. "We're not going to authorize taxpayer funding for abortion. I mean, it's been a consistent policy," Johnson said Wednesday.

Currently, subsidies can be used to pay for ACA plans that cover abortion services, but the enrollees are supposed to use their own money for the specific cost of that coverage, so federal funds don't go toward it. Antiabortion activists have long argued that under this setup, federal subsidies can indirectly fund abortion services.

President Trump told House Republicans on Tuesday that they should be "a little flexible" on abortion policy. His press secretary, Karoline Leavitt, later said that Trump was saying that "Republicans, and frankly Democrats, too, need to show a little bit more flexibility" to get something done on healthcare.

Trump has opposed extending the ACA subsidies, instead backing the general notion of funding health savings accounts.

Vermont Sen. Peter Welch, a Democrat involved in talks, said the president's comments were "a helpful sign" that the White House was paying attention to negotiations on the Hill. Any bipartisan deal "won't happen unless Trump weighs in and persuades Republicans that this is a good idea," he said.

About 20 million Americans benefited from enhanced ACA subsidies. Democrats shut down the government last year in a failed bid to force Republicans to extend the subsidies.

The Moreno framework continues the enhanced subsidies for two years and extends the ACA's open enrollment period. It includes some changes, including a cutoff on subsidy eligibility when an enrollee's income is more than 700% of the federal poverty level, or about $225,000 for a family of four. The framework also includes a new requirement, meant to deter fraudulent signups, that enrollees pay at least $5 a month toward their coverage, which could take the form of a $60 annual payment.

In year two, Moreno said, enrollees would be given a choice of putting subsidy funds into prefunded health savings accounts.

When the enhanced subsidies were in effect, there was no specific income cap on eligibility, with subsidies set up to ensure that enrollees didn't have to pay more than a set share of their income toward insurance premiums. With the expiration of the enhanced subsidies, ACA subsidies are cut off for households above 400% of the federal poverty level.

Requiring a minimum monthly payment would be a major shift. Roughly four in 10 ACA plan enrollees don't pay anything toward their premiums, based on data about sign-ups through the federal HealthCare.gov marketplace. That is more than double the share in 2020, before Democrats enhanced the existing tax credits that subsidize the cost of plans.

Write to Lindsay Wise at lindsay.wise@wsj.com, Siobhan Hughes at Siobhan.hughes@wsj.com and Anna Wilde Mathews at Anna.Mathews@wsj.com

(END) Dow Jones Newswires

January 07, 2026 17:02 ET (22:02 GMT)

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