There’s quite a bit to discuss, especially since Congress is currently at a standstill over significant issues.
In roughly 22 days, a key set of health subsidies will lapse, which could affect the insurance costs and availability for millions.
Yet, Congress plans to vacate Washington in about two weeks. Now we’re faced with a flurry of proposed solutions, though many Republicans seem uncertain about the direction to take.
Let’s break it down.
What is expiring? A selection of federal subsidies reducing health insurance premiums for millions in the Affordable Care Act (Obamacare). These are known as “Enhanced Premium Tax Credits” or simply “PTC.” They were a temporary addition meant to help during the pandemic.
What happens if the subsidies go away? According to KFF, a nonpartisan health policy research group, average premiums are projected to more than double by 2026.
Who will be affected? Specifically, Americans making over 400% of the federal poverty level and those purchasing insurance through the exchange will most likely lose their subsidies unless Congress intervenes. The specific subsidy amounts depend on state income levels and costs, while those under 400% of the poverty threshold will still receive them.
What’s the general strategy moving forward? Officials are proposing various plans (details below), but several core ideas keep surfacing among the different proposals.
- To extend the current subsidies.
- To reform by continuing subsidies, setting income limits, and introducing new copayments.
- To replace subsidies provided to insurers with direct payments to individuals, which could be used for health care purchases. These are often referred to as HSAs or “health savings accounts.”
What are the proposals from our leaders?
Here’s a quick summary of the top current options and their backing.
- No current plans: President Donald Trump and House Speaker Mike Johnson
- Switch to HSAs. Senate Republican Leader John Thune
- Extend the current subsidies. Democratic leaders Chuck Schumer and Hakeem Jeffries
What specific proposals are on the table?
There are several noteworthy suggestions currently being considered.
The first notable proposal is the extension of the existing subsidies.
Moreno-Collins Framework. From Senators Bernie Moreno (R-Ohio) and Susan Collins (R-Maine). While not a complete bill, it provides a framework.
- Will the subsidy expansion be extended? Yes, for two years.
- Income limit? Yes, it adds $200,000 as a cap for household income and requires a minimum monthly payment of $25.
“Common Ground” Plan. Proposed by a bipartisan group of 35 House members, led by Representatives Jen Kiggans (R-Va.) and Josh Gottheimer (D-N.J.), it outlines another framework.
- Will the subsidy expansion be continued? Yes, but only for one year.
- Income limit? Yes, the plan would phase out subsidies for incomes between 600% and 1,000% of the poverty level. There would be free registration until March 19, 2026, but it may spark contentious votes on key reforms, potentially including HSAs.
“Bipartisan Health Insurance Affordability Act.” Put forward by a coalition of eight House members, spearheaded by Representatives Brian Fitzpatrick (R-PA) and Tom Suozzi (D-N.Y.), it is an actual bill presented recently.
- Will subsidies be expanded? Yes, for two years.
- Income limit? Yes, at 700% of the poverty level.
Democratic Party’s Proposal. Congressional Democrats, led by Schumer and Jeffries, back a straightforward plan.
- Will subsidies be expanded? Yes, for three years.
- Income limit? No.
And then there are those pushing for HSA reforms.
Crapo-Cassidy Initiative. From Senators Mike Crapo (R-Idaho) and Bill Cassidy (R-Louisiana). This is an official proposal, termed the “Healthcare Freedom for Patients Act.”
- Will subsidies be expanded? Yes, but with notable changes.
- Income limit? Yes, at 700% of the poverty level.
- Alternative to HSAs? Yes, subsidies would be deposited in HSA accounts, varying by age: $1,000 for those aged 18-49 and $1,500 for those aged 50-65.
Scott Proposal. From Senator Rick Scott (R-Florida). This also represents an official bill, named “The More Affordable Care Act.”
- Will subsidies be expanded? No.
- Alternative to HSAs? Yes, Scott aims to retain the existing subsidies, restoring them to the original ACA cap of 400% of the poverty level. These individuals would receive support through an HSA-like account specifically for insurance premiums and other healthcare costs.
What’s next?
The Senate has scheduled two votes for Thursday: one concerning the Democrats’ three-year extension and another regarding the Senate Republicans’ Crapo-Cassidy plan.
Neither option is expected to succeed.
Also, there’s uncertainty surrounding whether the House and the White House will lean toward either proposal.
It will be interesting to see in the coming days if any party members are willing to support the other side in the Senate. However, the next steps remain uncertain.
This has left Republicans in a scramble with limited time before the subsidies expire.
A bipartisan group in the House might pursue a removal petition to circumvent leadership delays, although it’s unclear if they can gather the necessary 218 signatures.
As I’ve reiterated before, please stay tuned.
