Week Ahead: Winter Chills and APTC Thrills

As a polar vortex threatens the Northeast and Midwest with cold temperatures, lawmakers looking to extend the expiring enhanced advance premium tax credits (APTCs) are feeling the heat. With only eight days left before Congress is set to leave for the holiday recess, advocates are hoping for a cooling of relations between party leadership to avoid a blue Christmas. So, let’s get into it. Welcome to the Week Ahead!

The Administration

It’s all about moving forward at the Department of Health and Human Services (HHS) these days.  HHS announced its major AI strategy, “OneHHS” where all divisions will work together on a Department-wide AI infrastructure to boost internal operations, research, and public health.  But that isn’t the only collab HHS is working on.

Turning heads, a new Center for Medicare and Medicaid Innovation model called ACCESS was announced, which will test expanded access to new technologies by offering outcome-based payment incentives to primary care clinicians.  Bolstering this model will be the Food and Drug Administration’s TEMPO pilot, which will evaluate a risk-based enforcement approach to new digital health devices.  Together, the two models will help the agencies understand the interaction between access, cost, and improved care.

Speaking of models, CMS teased a new Accountable Care Organization (ACO) model called LEAD to be released in December.  The 10-year model will use an updated financial benchmarking approach, risk arrangements, and wellness incentives.

But, wait, where is the administration on APTCs??  The future is now.

The Senate

The Senate is expected to consider legislation to extend the enhanced APTCs this week, fulfilling Senate Majority Leader John Thune’s promise to Democrats in exchange for their votes to reopen the government. Senate Democrats are planning on bringing forward a three-year clean extension of the subsidies – legislation that mirrors the bill House Democrats have been trying to get enough signatures for to force a House floor vote.

There has also been talk about Senate Republicans bringing a bill forward that would redirect enhanced APTC funding to health savings accounts (HSAs), but only for marketplace enrollees with bronze or catastrophic plans, since they are now eligible for HSAs under the One Big Beautiful Bill Act.   Then there is the latest float by Republican Senators Bernie Moreno (OH) and Susan Collins (ME) that  would eliminate zero-premium plans and cap income eligibility for APTCs.

However, Leader Thune has not yet announced plans to move forward on this bill. Based on our conversation, both bills would fail to reach the 60-vote threshold required to pass the Senate. And even if the Democratic bill passed the Senate, it would be DOA in the House.

It will also be important to watch what happens at the Senate Homeland Security and Governmental Affairs Investigations Subcommittee hearing entitled, “Defining Our Healthcare Problem and Principles We Should Follow to Solve It.” This hearing, scheduled for December 10, is likely to see some fireworks, as Sen. Ron Johnson (R-WI), an avid Affordable Care Act critic, chairs the subcommittee. We will also be watching for potential wild cards, such as Sen. Bernie Moreno (R-OH), who is working on a short-term enhanced APTC extension provided reforms are made, and Sen. Jon Fetterman (D-PA), who supports an enhanced APTC extension, but has shown a willingness to break with his party when it comes to strategy on how to get that done.

Meanwhile, Senators have made progress on another health care issue that has long garnered bipartisan support: pharmacy benefit manager (PBM) reform.  Senate Finance Committee Chair Mike Crapo (R-ID) and Ranking Member Ron Wyden (D-OR) introduced legislation to address concerns about certain PBM practices that have been criticized for driving up prescription drug costs and limiting transparency. Our conversations on the Hill support the idea that this bill, or similar PBM reform legislation, could pass along with larger legislation, such as legislation that will be needed to continue government funding beyond January 30, 2026.

Other Health Care Hearings

• December 11: Senate HELP hearing on the Future of the U.S. Organ Procurement and Transplantation Network

The House

If you were to just listen to House Republican and Democratic leadership, you’d think negotiations over the extension of the enhanced APTCs were as frozen as a pond in winter. But beneath the surface, there are signs of a breakthrough. Most notably, a group of 35 bipartisan representatives, led by Reps. Jen Kiggans (R-VA) and Josh Gottheimer (D-NJ), introduced a health care framework outlining a two-year plan to extend the enhanced APTCs, phase them out for certain enrollees, and institute reforms to address fraud concerns. This framework also calls for PBM reforms and lists other health care policies as potential reforms to pursue, including boosting the Medicare Physician Fee Schedule and health care price transparency requirements.

But if negotiations are like a frozen pond, don’t expect to go swimming just yet. House Majority Leader Steve Scalise (R-LA) has said the Kiggans-Gottheimer framework is “not been a part of the package we’re discussing.” Additionally, both Speaker Mike Johnson (R-LA) and Leader Scalise have been hinting that their conference is close to unveiling its own health care reform legislation. This could be as soon as this week (if you ask Speaker Johnson), but certainly within the next few weeks, according to Leader Scalise.

There You Have It

Washington celebrated a couple of annual traditions with the lighting of the Capitol Christmas tree on December 2 and the lighting of the National Christmas tree on December 4. Are decorations up at your house? Let us know. Make it a great week!