President Trump’s Obamacare subsidy plan on hold due to Republican opposition
President Donald Trump’s Obamacare subsidy plan has been delayed after Republican opposition.
Senate Republicans want to send money directly to Americans rather than extend the Affordable Care Act’s enhanced subsidies that have lowered health insurance costs for millions of Americans.
Republican Sens. Mike Crapo and Bill Cassidy announced a bill on Dec. 8 that would deposit $1,000 to $1,500 into eligible consumers’ health savings accounts. The funding would replace an extension of enhanced COVID-19-era tax credits that significantly lower health insurance premiums under the Affordable Care Act, often referred to as “Obamacare.”
Senate Majority Leader John Thune confirmed that the Senate is scheduled to vote on the Crapo-Cassidy bill on Thursday, along with a Democratic proposal to extend the expiring ACA’s enhanced premium credits for three years.
Cassidy, chairman of the Senate Health, Education, Labor and Pensions Committee, said giving cash to patients could help them negotiate lower costs and make them better health consumers.
But health policy experts say some low-income consumers will likely end up paying Obamacare premiums under the Crapo-Cassidy bill.
The Crapo-Cassidy bill incorporates President Donald Trump’s idea to send money to consumers rather than health insurance companies, and is one of a handful of Republican health proposals announced in recent days.
Without enhanced tax credits that expire at the end of 2025, the average cost for the 22 million Americans with subsidized ACA insurance would more than double on January 1, 2026, according to the health policy nonprofit KFF.
What alternative does the Republican Party have to beef up Obamacare subsidies?
Under the Crapo-Cassidy Act, the federal government would deposit $1,000 into health savings accounts for consumers ages 18 to 49 and $1,500 for consumers ages 50 to 64. The payments are limited to those enrolled in bronze or catastrophic Affordable Care Act plans and who earn up to seven times the federal poverty level.
Health savings accounts are paired with high-deductible health insurance plans and allow consumers to save a portion of their paycheck before taxes. This money can be used for eligible expenses such as doctor and hospital bills and prescription drugs. Consumers can roll over their Health Savings Account balances from year to year, invest the funds, and spend the tax-free profits on qualified expenses.
The Crapo-Cassidy plan, which funds health savings accounts, “may cushion the financial impact of the loss of the enhanced premium tax credit, but only for certain segments of the population and probably not for most people,” said Cynthia Cox, vice president and ACA program director at KFF.
For example, Cox said consumers who can’t afford the monthly premiums for bronze or catastrophic plans won’t be able to receive health savings account payments.
Other Republicans have also proposed their own alternatives. Sen. Roger Marshall (R-Kansas) has proposed a bill that would extend the ACA’s enhanced subsidies into 2026 and then direct the funds to “health affordability accounts” like HSAs in 2027.
Sens. Bernie Moreno (R-Ohio) and Susan Collins (R-Maine) want to extend the ACA’s enhanced subsidies for two years with new income limits and eliminate the zero-premium health plan.
