The White House is circulating a draft proposal that would prolong enhanced Affordable Care Act subsidies for an additional two years, aiming to shield millions of Americans from steep increases in health insurance costs when the current tax credits run out at year’s end.
The emerging plan signals that President Donald Trump is willing to preserve a key provision of Obamacare even as his administration and congressional Republicans continue searching for a broader health care overhaul — a challenge that has dogged the party for years. A White House official emphasized that nothing is final until Trump formally unveils a proposal.
The subsidies were central to Democrats’ demands in the recent government funding standoff that ended earlier this month. Many Democrats insisted that extending the tax credits — which are set to expire at the end of the year — was a condition for supporting any measure to keep the government open.
Under the draft, eligibility for the enhanced Obamacare subsidies, first adopted during the COVID-19 pandemic to make coverage more affordable, would be limited to households earning up to 700% of the federal poverty level, according to two people familiar with the discussions. They spoke on condition of anonymity to describe an internal White House plan still in flux.
Originally, the Affordable Care Act’s premium tax credits were capped at 400% of the federal poverty level. That threshold was temporarily lifted during the pandemic so that many middle- and higher-income consumers could also qualify for financial assistance.
The White House proposal would also require all Obamacare enrollees to pay at least a modest premium, regardless of the type of plan they select. That change would end zero-premium options for lower-income consumers, addressing a long-standing Republican complaint that no-cost plans have opened the door to fraud. One idea under consideration would require everyone to contribute 2% of their income — or a minimum of $5 per month — for lower-tier plans.
Even as details shift, any move to extend a component of President Barack Obama’s signature health law is likely to unsettle conservatives who have pushed to repeal and replace the statute for more than a decade.
“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.”
Some Democrats, however, are signaling openness to parts of the early White House framework. Sen. Maggie Hassan of New Hampshire, one of eight Democrats who voted to reopen the government in the recent shutdown fight, called the draft “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.
Her fellow New Hampshire Democrat, Sen. Jeanne Shaheen — who helped lead bipartisan talks to end the shutdown — said she welcomed reports that Trump is weighing a concrete proposal.
“I’ve had constructive conversations with many of my Republican colleagues who I believe want to get this done,” Shaheen said. “They understand that the vast majority of people who benefit from these tax credits live in states the President won, and that the President’s own pollsters have underscored the enormous political urgency of Republicans acting.”
Back in 2017, Trump and Republicans failed in their effort to dismantle the Affordable Care Act, a high-profile setback after the party seized full control of Washington. Since then, Republicans have struggled to unite behind a single replacement plan. The looming expiration of the pandemic-era subsidies now gives Trump and GOP lawmakers another opening to reshape the health care landscape.
While the White House’s Domestic Policy Council works on its proposal, key lawmakers have been drafting their own ideas. Florida Sen. Rick Scott, Louisiana Sen. Bill Cassidy and others have floated plans that would redirect federal subsidy dollars into health savings accounts, allowing enrollees to use the funds to shop for coverage or pay out-of-pocket expenses. Scott’s plan has been presented to the White House multiple times since it was released Thursday, according to a person familiar with the private talks.
The White House draft would also permit people enrolled in lower-tier plans — such as bronze-level or catastrophic coverage — to contribute to health savings accounts.
In addition, the proposal would lock into law what’s known as the “program integrity rule,” aimed at strengthening efforts to curb fraud, waste and abuse in the system.
Consumers browsing for Obamacare plans have already encountered higher prices, since open enrollment for next year’s coverage began Nov. 1. Without action from Congress, the average subsidized enrollee could see their premiums more than double next year, according to an analysis by health policy research organization KFF.
National polls show that Americans remain deeply concerned about health care expenses and the broader cost of living. Those anxieties were reflected in elections earlier this month, which delivered victories to Democrats who had centered their campaigns on affordability and rising everyday costs.Thinking
