WASHINGTON (States Newsroom) — U.S. Senate Republicans announced Tuesday they will hold a vote on their own health care proposal later this week to counter a Democratic bill that would extend enhanced tax credits for Affordable Care Act marketplace plans for three more years.
The 32-page GOP bill would not address the expiring ACA marketplace tax credits but would send payments to certain Americans through Health Savings Accounts to cover some of the cost of health care.
Neither measure has the 60 votes needed to advance under that chamber’s rules. That would leave the ACA marketplace subsidies to expire at the end of the year and dramatically spike the cost of health insurance for the millions of people enrolled in those plans.
Senate Majority Leader John Thune, R-S.D., said Democrats’ bill to simply extend the enhanced ACA marketplace tax credits to offset the costs Americans pay for that insurance was unacceptable.
“The way that the program is structured, the money goes straight to the insurance companies,” Thune said. “And the way that we think this ought to work is you ought to come up with a way in which you can deliver the benefit to the patients and not to the insurance companies.”
Thune said the Democratic bill lacks an income cap for ACA marketplace tax credits and allows $0 premiums for health insurance plans — guaranteeing the measure will fail.
Senate Democratic Leader Chuck Schumer, of New York, called the GOP proposal a “nonstarter” that would lead to “junk insurance.” He said the only way to avoid a dramatic increase in health insurance costs next year is to extend the enhanced ACA tax credits.
“Their phony proposal is dead on arrival,” Schumer said. “The bill not only fails to extend the tax credits, it increases costs, adds tons of new abortion restrictions for women, expands junk fees and permanently funds cost-sharing reductions.”
Multiple plans
Senate Republicans have debated for weeks whether to hold a vote on a GOP plan to show the party has something to offer toward reducing health care costs. Thune promised Democrats a vote on a health care bill of their choosing in exchange for votes to end the government shutdown.
Schumer announced last week that Democrats would hold the vote on a three-year extension of the enhanced ACA tax credits as they exist now.
Several GOP senators, including Maine’s Susan Collins and Ohio’s Bernie Moreno, have released plans that would include an extension of the expiring tax credits while beginning to transition away from those subsidies.
But Republican leaders ultimately decided to hold a vote on a proposal released earlier this week by Health, Education, Labor and Pensions Committee Chairman Bill Cassidy, R-La., and Finance Committee Chairman Mike Crapo, R-Idaho.
The Cassidy-Crapo legislation would have the Department of Health and Human Services deposit money into Health Savings Accounts for people enrolled in bronze or catastrophic health insurance plans purchased on the ACA marketplace in 2026 or 2027, according to a summary of the bill.
Health Savings Accounts are tax-advantaged savings accounts that consumers can use to pay for medical expenses that are not otherwise reimbursed. They are not health insurance products.
ACA marketplace enrollees who select a bronze or catastrophic plan and make up to 700% of the federal poverty level would receive $1,000 annually if they are between the ages of 18 and 49 and $1,500 per year if they are between the ages of 50 and 64.
That would set a threshold of $109,550 in annual income for one person, or $225,050 for a family of four, according to the 2025 federal poverty guidelines. The numbers are somewhat higher for residents of Alaska and Hawaii.
The funding could not go toward abortion access or gender transitions, according to the Republican bill summary.
Proposal modeled on Trump comments
Cassidy and Crapo outlined how their proposal would work during afternoon floor speeches, where they also aired their grievances with how the Affordable Care Act has affected Americans’ health care costs.
Crapo rebuked Democrats for establishing the enhanced ACA marketplace tax credits during the coronavirus pandemic and scheduling them to sunset at the end of this year.
“The pattern has become clear: Democrats respond to rising premiums by throwing taxpayer dollars at the problem,” Crapo said. “Their supposedly short-term fixes only drive premiums higher and make the problem harder to solve. Leaving us with apparently no choice other than to do the same thing again and again and again.”
The GOP plan, he said, was modeled off President Donald Trump’s request to send funding directly to Americans to spend on their health care.
“Families can use that money to cover costs not handled by their insurance policy without having to wait for insurance companies to approve their treatment decisions,” Crapo said. “Because families want the best value for their money, they will seek out the most appropriate treatment. Over time this will result in lower health care costs as providers compete for patients.”
Cassidy said the bill would not subsidize health insurance premiums but would help some Americans pay for doctor exams, dentist visits, glasses and prescriptions.
Once eligible ACA marketplace enrollees receive that funding in their Health Savings Accounts, he said, they will shop around for better prices, including on x-rays, which are often used to determine if someone has broken a bone.
“She’s going to say, ‘Wait a second, the x-ray is $150 here and $500 there. I’m going to where it’s cheaper, not more expensive,’” Cassidy said, giving an example. “And I can tell you when that begins to happen, the people who are more expensive begin to lower their price.”
