Two Republican senators have introduced a plan that would send $1,000 to $1,500 directly into health care savings accounts for eligible Americans, instead of routing the money through insurance companies.
Why It Matters
Roughly 23 million Americans are on track to see their health care costs climb starting in January, as Congress remains at a stalemate over whether to renew the Affordable Care Act (ACA) tax credits set to expire on December 31.
Democrats are pushing to extend the enhanced ACA subsidies for another two or three years, while Republicans are promoting several competing ideas.
Democrats are expected to get a Senate vote later this week on their extension plan. The measure is widely expected to fail due to insufficient Republican support, but GOP lawmakers agreed to hold the vote after Democrats made it a condition for reopening the government following the historic shutdown that ended last month.
What To Know
Louisiana Senator Bill Cassidy, who leads the Senate health committee, and Idaho Senator Mike Crapo, who chairs the finance committee, rolled out their proposal on Monday.
According to a summary reviewed by Newsweek, “Americans cannot afford health care. They need a serious solution that provides real relief to a broken system. In line with President [Donald] Trump’s call, Republicans propose redirecting money going to insurance companies back to patients.”
Under their outline:
- ACA enrollees with incomes below 700 percent of the federal poverty level would receive a one-time deposit into a Health Savings Account (HSA).
- Adults ages 18 to 49 would receive $1,000.
- Adults ages 50 to 64 would receive $1,500.
An HSA is a tax-advantaged account used to pay for qualified medical expenses, typically paired with a high-deductible health plan. Contributions are not taxed, the money can grow tax-free, and withdrawals for eligible health care expenses are also untaxed. Any unused funds roll over each year, allowing balances to accumulate over time.
The proposal specifies that these funds could not be used for abortion services or gender transition care.
The plan would also:
- Fund ACA cost-sharing reduction payments, which are expected to help lower premiums overall but may reduce subsidies for some enrollees.
- Expand access to lower-cost “catastrophic” health plans.
- Reduce Medicaid funding to states that provide coverage to undocumented immigrants.
Trump’s Push on Health Care
The Cassidy–Crapo plan also answers Donald Trump’s call to convert ACA subsidies into direct payments to Americans. He has urged that enhanced ACA subsidy dollars be redirected into health savings accounts that people can then use for their out-of-pocket expenses.
“I want to give the people better health insurance for less money,” he told Politico this week. “The people will get the money and they’re going to buy the health insurance that they want.”
Republicans have floated additional alternatives. Ohio Senator Bernie Moreno has co-sponsored the Consumer Affordability and Responsibility Enhancement (CARE) Act, which would temporarily extend the ACA Premium Tax Credits while offering Americans a two-year glide path off the pandemic-era subsidies.
“Some of our folks who are working on this issue are trying to come up with something that unites Senate Republicans,” GOP Senate leader John Thune said last week, noting that “consultations [are] going on all the time with the White House.”
What Happens Next
It is still uncertain whether the Cassidy–Crapo plan will win broad support within the 53-member Senate Republican conference. GOP senators are set to review this and other health care proposals during a closed-door lunch on Tuesday, where they will try to determine whether they can coalesce around a single strategy.
