The White House is circulating a draft proposal that would extend enhanced Affordable Care Act (ACA) subsidies for two more years, just weeks before millions of Americans are set to see their health insurance costs spike if current tax credits expire at the end of the year.
The still-evolving plan signals that President Donald Trump is open to prolonging a key piece of Obamacare even as his administration and congressional Republicans continue searching for a broader, long-term replacement — an effort that has frustrated the party for more than a decade. A White House official emphasized that nothing is final until Trump unveils his own proposal.
The temporary subsidies were central to Democrats’ demands during the recent government shutdown fight, which ended earlier this month. Most Democrats had pushed for a simple extension of the expiring tax credits as a condition for keeping the government open.
Under the White House draft, eligibility for the enhanced Obamacare subsidies — created during the COVID-19 pandemic to help people afford coverage — would be capped at 700% of the federal poverty level, according to two people familiar with the proposal who spoke on condition of anonymity to discuss internal deliberations. The original ACA tax credits were capped at 400% of the federal poverty level but were temporarily expanded so that many middle- and higher-income households could also qualify.
The proposal would also require everyone enrolled in an ACA plan to pay at least some premium, regardless of the type of coverage they select. That change would effectively end zero-premium plans for lower-income enrollees, addressing a long-standing concern among Republicans that the current structure invites fraud. One idea under consideration is to require people to pay 2% of their income — or at least $5 per month — for lower-tier plans.
Even as details shift, the notion of extending any part of former President Barack Obama’s signature health law is likely to irritate conservative critics who have pushed to repeal and replace the ACA since its passage.
“Until President Trump makes an announcement himself, any reporting about the administration’s health care positions is mere speculation,” White House spokesman Kush Desai said Monday.
White House press secretary Karoline Leavitt told reporters that Trump “is very much involved in these talks” and is “focused on unveiling a health care proposal that will fix the system and will bring down costs for consumers.”
There are early signs, however, that at least some elements of the White House draft could attract Democratic support. New Hampshire Sen. Maggie Hassan, one of eight members of the Senate Democratic caucus who voted to reopen the government earlier this month, called the plan “a starting point for serious negotiations.”
“The fact that President Trump is putting forward any offer at all to extend the Affordable Care Act’s tax credits shows that there is a broad understanding that inaction in this regard will cause serious harm to the American people,” Hassan said.
Trump’s attempt to dismantle the ACA in 2017 fell short, a stinging setback for Republicans who then controlled the White House and both chambers of Congress. Since then, the GOP has struggled to unite behind a single health care blueprint. The looming expiration of the pandemic-era subsidies now gives Trump and his party a fresh opening to put their own stamp on the issue.
While the Domestic Policy Council has been quietly crafting the administration’s plan, lawmakers on Capitol Hill have been sketching out ideas of their own. Florida Sen. Rick Scott, Louisiana Sen. Bill Cassidy and others have floated proposals to redirect federal subsidy spending into health savings accounts (HSAs), giving enrollees more flexibility to shop for plans or cover out-of-pocket costs.
The White House draft would allow people in lower-tier Obamacare plans — such as bronze-level or catastrophic coverage — to contribute to HSAs. It would also codify the so-called “program integrity rule,” aimed at tightening oversight and reducing fraud, waste and abuse.
Americans shopping for ACA coverage this fall have already been hit with sticker shock as the enrollment window for next year’s plans opened on Nov. 1. Without action from Congress before the end of the year, the average subsidized enrollee is projected to see their premiums more than double next year, according to an analysis by the health care research nonprofit KFF.
Recent national polling shows that voters are deeply worried about health care costs as part of a broader anxiety over the rising cost of living. Those concerns were reflected in elections earlier this month, where candidates who emphasized economic and affordability issues — including health care — helped propel Democrats to key victories.
