Lamont Pledges $70M for Health Care After US Senate Deadlocks

Connecticut will spend $70 million to partly offset the looming loss of $295 million in enhanced federal tax credits that subsidize health insurance premiums for tens of thousands of residents under the Affordable Care Act, Gov. Ned Lamont said.

Using emergency authority granted him by the General Assembly in special session last month, the governor announced the commitment minutes after the U.S. Senate failed to advance either a Democratic proposal to extend the credits or a Republican alternative.

“This is a one-year fix,” Lamont told reporters in a hastily called press conference outside his office at the state Capitol. “We’ll be able to mitigate the pain coming out of the confusion in Washington.”

The state money is expected to keep premiums stable for singles earning up to $56,000 annually and for families of four earning up to $128,000, Lamont said. “We’re also working with OPM and Access Health to see if we can find a partial subsidy for folks earning a little bit more than that, say $75,000 for a single and $160,000 for a family of four,” Lamont said.

OPM is the governor’s Office of Policy and Management. Access Health CT is the official health insurance marketplace created to meet the requirements of the Affordable Care Act.

The governor’s staff could not answer a key question: Will premiums be adjusted for those who already have purchased coverage for the coming year?

So far, enrollment in health plans on the state’s marketplace, Access Health CT, has remained steady despite the uncertainty in Congress.

The General Assembly last month set aside $500 million in surplus funds for use offsetting federal cuts, including changes limiting eligibility for Medicaid and federal SNAP food assistance.

“I think there are going to be a lot of real needs,” Lamont said earlier. “We’ll have a lot more clarity, I think by the end of this month. We’ll be prepared to act in January.”

The $70 million for health premiums represent the first draw down from the $500 million contingency. Barring disapproval from a committee of the legislature’s top six leaders, Lamont has the authority to unilaterally draw from the $500 million until the legislature returns for its next regular session in February.

House Speaker Matt Ritter, D-Hartford, said the governor’s action was exactly what the legislature envisioned in passing the emergency bill. None of the six leaders disapproved of Lamont’s move, including Senate Minority Leader Stephen Harding, R-Brookfield, who voted against the bill granting Lamont the emergency authority.

“I support it. I think this is what the fund was intended for,” said Harding, who would have preferred providing the money through a direct appropriation, not creation of a $500 million discretionary fund.

At issue is an enhanced tax credit that was created in 2021 and extended through 2025. Pegged to income, it lowered the costs of premiums and contributed to a more-than-doubling of enrollment in what is popularly known as Obamacare, from 11 million to 24 million, according to nonprofit research foundation KFF.
Health care has been a consistently challenging and polarizing issue for Congress, especially for Republicans who have struggled to coalesce behind a plan of their own since the passage of the Affordable Care Act more than a decade ago.

And if the subsidies lapse and costs soar next year, the issue is expected to once again play a central role in the 2026 midterm elections with the House and Senate majorities at stake. Democrats ran heavily on health care and Obamacare repeal efforts during the 2018 midterm elections in Trump’s first term and took back control of the House in a wave election.

With premium hikes looming, the Senate voted on Dec. 11 on competing health care proposals, though only one directly addressed the imminent lapse of the subsidies. Democrats voted on a three-year extension of the enhanced premium subsidies that were created in 2021 as part of the party’s pandemic relief bill.
The Republicans’ bill would let the subsidies expire at the end of the year and instead expand health savings accounts. Those who earn up to 700% of the federal poverty level would receive up to $1,500 in their HSAs.

Both failed to advance in key procedural votes that required at least 60 votes. The GOP bill was blocked in a nearly party-line vote, and Democrats only won over four Republican senators when they needed 13.
The Senate vote was a consolation prize for Democrats who voted with Republicans last month to reopen the government after a 43-day shutdown. Senate GOP leaders promised a vote on extending the subsidies, which were at the heart of Democrats’ demands during the shutdown.

But the shutdown deal left most Democrats frustrated since there was no guarantee the subsidies would continue next year and House leadership wasn’t committing to hold a similar vote.

Connecticut’s U.S. senators, Chris Murphy and Richard Blumenthal, voted in support of Democrats’ subsidy extension. And they both opposed Republicans’ counterproposal expanding HSAs.

If the federal subsidies sunset on Dec. 31, individual enrollees in Connecticut could see their premiums rise by an average of $2,380 per year — or about $198 a month, according to mid-October estimates provided by Access Health CT. A household of four would see premiums rise by an average of over $10,000 per year.