As millions of Americans stare down increased health care costs in the new year, a cohort of California leaders gathered Thursday to warn against the Trump administration’s proposed solutions.

Congress could not get it together on Thursday when two competing bills, each attempting to assist vulnerable Americans at risk of losing their health care in just three weeks, failed to get enough votes to move forward. The central issue surrounds tax credits granted under the Affordable Care Act, better known as Obamacare, which lessened the cost of premiums for health care plans purchased on the open marketplace — known in California as Covered California. 

In 2021, the Biden administration extended enhanced tax credits to lower-income Americans to make insurance coverage more accessible amid the COVID-19 pandemic. Those enhanced credits are set to expire on Dec. 31.

Senate Democrats had proposed extending those early-COVID-era credits for another three years, while upper-chamber Republicans proposed bolstering funding for health savings accounts, which typically accompany high deductible plans, to offset increased premiums. Neither proposal got enough votes in the Senate.

Now, it is very likely that those subsidies will expire by January, as those two proposals were likely the last opportunities to address the issue. Next week is the final week that Congress is scheduled to meet until the new year.

Nearly 2 million Californians are expected to purchase health care coverage through Covered California next year, according to a Covered California news release from October. The same release predicted health care premiums could rise by 97% on average for over 1.7 million of those customers if the subsidies lapse. By contrast, Healthcare Dive, a publication covering the health care industry, noted that extending the credits would mean 400,000 more people were insured in 2026 than otherwise would be.

California Sen. Alex Padilla noted during a Thursday press conference that many Americans are confronting this reality right now, as they go through open enrollment and see higher premium estimates for next year’s plans. Padilla further warned Californians against the Trump administration’s proposal of “junk” alternative plans, which are basically short-term health care plans that are marketed as having low monthly payments but have been reported to put people into enormous medical debt due to sneaky and unforeseen costs. Republicans are encouraging support for the high-deductible plans, which have lower monthly premiums but would leave customers with high out-of-pocket costs if they need significant care, with GOP Sen. Bill Cassidy saying that option “empowers the patient to lower the cost.” 

“They waited until the 11th hour, literally just yesterday, to put forward a proposal that actually would not even lower premiums for a single American,” Padilla said of Republicans’ Thursday proposal to bolster HSA funding. “Instead what seems to be their objective is to push junk health plans on families across the country while allowing these lifesaving ACA tax credits to expire. It’s an unserious proposal and puts lives at risk.”

The drastic changes to Obamacare subsidies have arguably been the biggest pressure point in Congress this session, with Democrats holding firm on the matter earlier this year en route to the longest government shutdown in history. 

Dr. Rachel Ruiz, a doctor at Santa Clara Valley Medical Center and chair of Valley Physicians Group based in Santa Clara, said during the news conference that working without these benefits in the health care system will feel like “working in quicksand.” Ruiz urged that if those tax credits are not protected, facilities like the one she oversees, which include burn and trauma centers, will be gravely impacted.

“When a family is in crisis, they shouldn’t have to worry about how it will be paid for,” said Jessica Wilson (Cruz), CEO of National Alliance on Mental Illness of California, who also attended the press conference. Wilson said without the tax credits, families will feel the “ripple effects” of losing out on lifesaving care.

Two California congressmembers — Democrat Sam Liccardo of the 16th District and Republican Kevin Kiley of the 3rd District — worked together to propose a bill in November that would extend the tax credits to prevent sky-high premiums from going into effect in 2026. The pair argues their proposal would also save taxpayers money over the next decade and constrain rising health care costs. 

“I think I’m one of the eternal optimists,” Padilla said when asked Thursday about whether that bill could be passed as a last resort. “When there’s a will, there’s a way. These are all encouraging signs, right?” 

Padilla acknowledged that there are Republicans who are willing to participate and collaborate on saving the subsidies, but it’s “now a question of leadership about whether they will let a measure come up for a vote.”