President Donald Trump has thrown his support behind a Republican plan that would send one-time cash deposits directly into Americans’ health care accounts instead of to insurance companies.
Louisiana Senator Bill Cassidy, who chairs the Senate health committee, and Idaho Senator Mike Crapo, head of the finance panel, have introduced a proposal that would give certain Affordable Care Act (ACA) enrollees a single deposit of $1,000 for those ages 18 to 49 and $1,500 for people ages 50 to 64.
“I like the concept. I don’t want to give the insurance companies any money,” Trump told reporters aboard Air Force One on Tuesday. “They’ve been ripping off the public for years.”
Why It Matters
More than 20 million Americans are facing higher health care costs starting in January, as Congress remains deadlocked over whether to renew ACA (Obamacare) tax credits that expire on December 31.
Democrats are pushing to extend these enhanced subsidies for two or three more years, while Republicans are advancing alternative approaches, including the new HSA-based proposal.
Democrats are expected to force a Senate vote this week on their plan to continue the increased ACA subsidies. The measure is widely expected to fall short due to limited Republican support, but the GOP agreed to allow the vote as part of the deal to end last month’s record-breaking government shutdown.
What To Know
A Health Savings Account (HSA) is a tax-advantaged account used to pay for qualified medical expenses, typically paired with a high-deductible health plan. Contributions are tax-free, investment growth isn’t taxed, and withdrawals for eligible medical costs are also untaxed. Money can roll over from year to year, allowing funds to accumulate.
Under the Cassidy–Crapo proposal, HSA dollars could not be used for abortion services or gender transition care.
The plan would also continue ACA cost-sharing reduction payments, which help lower overall premiums but would reduce subsidies for some enrollees. Additional provisions aim to expand access to cheaper “catastrophic” plans and reduce Medicaid funding to states that provide coverage for undocumented immigrants.
“Americans cannot afford health care. They need a serious solution that provides real relief to a broken system,” a summary of the proposal obtained by Newsweek states. “In line with President [Donald] Trump’s call, Republicans propose redirecting money going to insurance companies back to patients.”
As the deadline for ACA subsidies approaches, Republicans have put forward several competing ideas. Senator Bernie Moreno of Ohio has jointly introduced the Consumer Affordability and Responsibility Enhancement (CARE) Act, which would temporarily extend the ACA Premium Tax Credit while creating a two-year glide path away from the pandemic-era credits.
What People Are Saying
Trump told Politico this week, “I want to give the people better health insurance for less money.”
“The people will get the money and they’re going to buy the health insurance that they want,” he added.
Republican Senate Majority Leader John Thune argued the plan would significantly reduce costs:
“It actually does make health insurance premiums more affordable. It drives down, according to the Congressional Budget Office, premiums by double-digit levels. It delivers the benefit directly to the patient, not to the insurance company. And it does it in a way that actually saves money—to the taxpayer.”
The Center for American Progress, a left-leaning think tank, sharply criticized the Cassidy–Crapo framework in an analysis:
“Senate Republicans’ alternative to extending the enhanced premium tax credits is not a real health care plan. It shifts financial risk onto families, fractures insurance markets, and revives low-value products that have failed consumers in the past. At a moment when millions of Americans face significant premium hikes, Congress must choose the only viable path—extending the enhanced premium tax credits.”
Democratic House Minority Leader Hakeem Jeffries also condemned the GOP’s handling of the issue:
“Democrats have been pressing our Republican colleagues for months to deal with the health care crisis that they have created. And in a matter of just a few weeks, tens of millions of Americans who live in every single state across this country are about to experience dramatically increased health care costs.”
What Happens Next
Thune has confirmed that the Senate will vote on the Republican bill on Thursday. Lawmakers were already scheduled to vote the same day on the Democrats’ plan to extend the soon-to-expire ACA subsidies, setting up a direct clash over how—if at all—to shield Americans from higher health care costs in the new year.
