@dmat  "Are they thinking it may be deductible as well as forgiven?"

Why not think that?

If taxpayers used $1,800 in EIPs to pay medical expenses, wouldn't that be deductible?

Someone paid the insurance bill.  The insurance companies didn't write it off.  I don't think we have heard the last of the issue, and I will not be surprised if the answer is "we're not going to raise your taxes just because we didn't let you pay for your health insurance."