Congressional Republicans are scrambling to come up with a plan to address the pain of health care premiums skyrocketing for roughly 22 million Americans.
With less than six weeks before a key set of Affordable Care Act premium subsidies expire, congressional Republicans arescramblingto come up with a plan to address the pain of health care premiums skyrocketing for roughly 22 million Americans.
Health care has long been a thorny issue for Republicans, and this time is no different. The caucus is divided, with some more moderate — and vulnerable — GOP lawmakers looking to temporarily extend the enhanced Obamacare subsidies with several changes. But others are followingPresident Donald Trump’s pushto send federal assistance directly to consumers, rather than health insurers.
Adding to the pressure is the looming mid-December vote in the Senate on extending the enhanced subsidies, which was a concession the several Democrats wrangled from GOP leaders in exchange for agreeing to end the record-longfederal government shutdown. However, it’s questionable if any plan — from either party — can win enough support to pass, and it’s not feasible to enact more substantive changes to the ACA subsidy structure before 2026 coverage begins.
Enacted by the Biden administration in 2021, theenhanced premium subsidiesmade Obamacare policies more affordable — particularly for low-income consumers, who could find plans with $0 or near $0 monthly charges, and for the middle class, who became eligible for assistance for the first time. The beefed-up subsidies helped draw arecord 24 million peopleto sign up for coverage this year, double the number that enrolled in 2020. And more than 90% of them receive premium assistance.
If the enhanced subsidies lapse as scheduled, premiums are expected to soar 114%, on average, according to KFF, a nonpartisan health policy research group. A 60-year-old couple making $85,000 could have to pay $20,000 more annually for coverage. Roughly 2 million fewer people will be insured next year if the more generous assistance lapses, according to the Congressional Budget Office. Extending the enhanced subsidies would cost about $350 billion over the next decade
Earlier this month, Trump pushed the idea of sending subsidies directly to consumers, rather than to insurers, as is now the case in the Affordable Care Act.
“THE MONEY MUST NOW GO DIRECTLY TO THE PEOPLE, TAKING THE “FAT CAT” INSURANCE COMPANIES OUT OF THE CORRUPT SYSTEM OF HEALTHCARE,” Trumpposted on Truth Socialon November 8. “THE PEOPLE CAN BUY THEIR OWN, MUCH BETTER POLICY, FOR MUCH LESS MONEY, SAVING, FOR THEMSELVES, AN ABSOLUTE FORTUNE!!!”
At least two senators have jumped on Trump’s declaration, sketching out different ways of shifting federal funds to consumers.
Giving Americans more control over their health care spending is a longtime goal of many Republicans, said Rodney Whitlock, vice president at McDermott+ and former health policy director for Republican Sen. Chuck Grassley of Iowa. GOP lawmakers have long advocated for greater use of health savings accounts, or HSAs, which allow people to sock away money that can be used to pay for medical expenses tax free — though the funds typically can’t be used to pay for health insurance premiums.
Republican Sen. Rick Scott of Florida is working on a bill that will give Americans funds “in HSA-style accounts and let them buy the health care they want. This will increase competition & drive down costs,” heposted on Xin response to Trump.
Scott has not provided many details on his legislation buttold Fox Newson Sunday that people could use the funds to pay for premiums or co-pays. His proposal doesn’t seek to repeal Obamacare, but to fix it, he said.
However, ideas like Trump’s and Scott’s could rock the Affordable Care Act and, potentially, lead to its withering or demise, experts say. That’s because people with fewer health care needs would likely use the funds to buy less comprehensive, less expensive coverage, leaving sicker, costlier enrollees in Obamacare policies and prompting insurers to raise premiums.
“This would in a big way pull healthy people out of the ACA risk pool and likely lead to a premium death spiral and collapse of the ACA marketplaces,” said Larry Levitt, KFF’s executive vice president for health policy.
An alternate plan promoted by GOP Sen. Bill Cassidy of Louisiana would direct the funds that would have been spent on the enhanced subsidies into flexible spending accounts that policyholders could use to shop for health care, which he argues would give patients incentives to find better prices. Cassidy is also open to the use of HSAs since the Republicans’ One Big Beautiful Bill broadened eligibility to more ACA enrollees, a spokesman for the senator told CNN.
“We empower patients to shop to find the best deal for their dollar that drives competition and that lowers cost,” Cassidy said in a speech on the Senate floor last week.
Cassidy, who said on CBS’ Face the Nation on Sunday that he is in communication with the White House about his plan, would retain the original Affordable Care Act subsidies, which were part of the 2010 health reform law and are not expiring.
However, the complex US health care system is not designed for patients to shop for services, despite attempts by the first Trump administration to increase price transparency, experts said. It can be difficult for insured patients to know how much they would be responsible for when taking into account negotiated rates, deductibles and co-insurance. Plus, most spending is driven by sick patients who already have relationships with providers, and consolidation in the industry has decreased competition.
“In theory, it seems like a good idea,” said Mona Shah, senior director of policy and strategy at Community Catalyst, which advocates for equitable health care. “The reality is even if that [price] information is accessible, how many people could navigate that, understand the differences, have the time to do that and then make informed decisions?”
Also, giving consumers more control over the funds could actually put upward pressure on health care prices since they’ll have more money to spend on services, said Michael Cannon, director of health policy studies at the libertarian Cato Institute.
Meanwhile, there are efforts on Capitol Hill to extend the enhanced subsidies, which are formally known as premium tax credits, though some GOP lawmakers are advocating changes to the assistance.
A bipartisan group of 30 House memberswrote a letterMonday to Senate Majority Leader John Thune and Senate Minority Leader Chuck Schumer, urging them to include House lawmakers in the health reform discussions. Among the authors was Virginia Rep. Jen Kiggans, a Republican, who wants to extend the enhanced subsidies for a year to give Congress time to come up with an alternate plan.
“As you know, those who rely on the expiring Affordable Care Act enhanced premium tax credits (ePTCs) are facing drastic premium increases,” the representatives wrote. “Allowing these tax credits to lapse without a clear path forward would risk real harm to those we represent.”
Another bipartisan House proposal calls for extending the enhanced subsidies for two years but placing an income cap on beefed-up assistance, phasing it out for those who make between $200,000 and $400,000 annually.
Neither party wants “to see premiums skyrocket, and they will if these [enhanced subsidies] expire with nothing in its place,” GOP Rep. Don Bacon of Nebraska, a member of the House Problem Solvers Caucus who supports the effort, told CBS’ Face the Nation on Sunday. “It can’t just be a Republican plan if we want to pass something. So we got to sit down with Democrats and figure out what can we do.”