Trump plan for Obamacare subsidies on hold after GOP pushback
President Donald Trump’s plan for Obamacare subsidies was delayed following Republican pushback.
Senate Republicans want to send money directly to Americans rather than extending enhanced Affordable Care Act subsidies that have lowered health insurance costs for millions of Americans.
Republican Sens. Mike Crapo and Bill Cassidy on Dec. 8 unveiled a bill that would deposit $1,000 to $1,500 into health savings accounts for eligible consumers. This money would be in lieu of extending COVID-19-era enhanced tax credits that sharply reduced health premiums under the Affordable Care Act, often called “Obamacare.”
Senate Majority Leader John Thune confirmed the Senate will vote Thursday on the Crapo-Cassidy bill alongside a Democratic proposal to extend the ACA’s expiring enhanced premium tax credits for three years.
Cassidy, chair of the Senate Committee on Health, Education, Labor and Pensions, has said that empowering patients with cash could make them better health consumers by enabling them to bargain for lower costs.
But health policy experts say some lower-income consumers would likely end up paying more for Obamacare coverage under the Crapo-Cassidy bill.
The Crapo-Cassidy bill, which incorporates President Donald Trump’s idea to send money to consumers instead of health insurance companies, is one of a handful of GOP health proposals unveiled in recent days.
Without the enhanced tax credits that expire at the end of 2025, average costs for 22 million Americans who get subsidized ACA insurance will more than double on Jan. 1, 2026, according to KFF, a health policy nonprofit.
What’s in the GOP alternatives to Obamacare’s enhanced subsidies?
Under the Crapo-Cassidy legislation, the federal government would deposit $1,000 into a health savings account for consumers ages 18 to 49 or $1,500 for consumers ages 50 to 64. The payment would be limited to people who are enrolled in a bronze or catastrophic Affordable Care Act plan and who earn up to seven times the federal poverty level.
Health savings accounts, which are paired with high-deductible health insurance plans, allow consumers to save part of their paycheck before taxes. The money can be spent on eligible expenses such as doctor or hospital bills or prescription drugs. Consumers can roll over health savings account balances from year to year, invest the money and spend tax-free gains on eligible expenses.
The Crapo-Cassidy plan to fund health savings accounts “could cushion the financial impact of the lost enhanced premium tax credits, but only for a certain segment of the population, probably not for most,” said Cynthia Cox, KFF’s vice president and director of the Program on the ACA.
For example, consumers who can’t afford to pay the monthly premium for a bronze or catastrophic plan wouldn’t be able to collect the health savings account payment, Cox said.
Other Republicans have proposed their own alternatives. Sen. Roger Marshall, R-Kansas, proposed legislation to extend the ACA’s enhanced subsidies in 2026 before directing funding in 2027 to HSA-like “health affordability accounts.”
Sens. Bernie Moreno, R-Ohio, and Susan Collins, R-Maine, want to extend the ACA’s enhanced subsidies for two years with a new income cap and eliminate zero-premium health insurance plans.
