Sen. Bill Cassidy on Monday proposed replacing enhanced Affordable Care Act premium tax credits with pre-paid health savings accounts.
The Louisiana Republican’s proposal comes as lawmakers scramble to find a remedy for skyrocketing costs of Obamacare health insurance premiums.
The boosted ACA tax credits, which this year have lowered the cost of Obamacare plans for about 20 million Americans, are set to expire at the end of December.
Cassidy’s proposal would allow people who signed up for a so-called Bronze Plan through Obamacare marketplaces to get a pre-paid HSA, funded in part by the lapsed tax credits.
While HSAs would not help pay for monthly premiums, Cassidy told reporters that they would help reduce the cost of health-care expenses, such as co-payments, deductibles, and coinsurance.
Bronze plans generally cover 60% of an enrollee’s health costs, with the enrollee responsible for paying the remaining 40% out of pocket.
“Is there anybody who would not want to take a large portion of that, which we’re using to help Americans purchase health care, and give it directly to the individual, so that 100% of its used to purchase health care, as opposed to, as opposed to giving that money to the insurance company, of which 20% goes for profit and overhead?” asked Cassidy, who is chairman of the Senate Committee on Health, Education, Labor and Pensions.
The federal government shut down on Oct. 1, and remained shut down for weeks when Senate Democrats refused to vote for a stopgap funding bill because it did not include an extension of the enhanced ACA credits.
Last week, seven Democrats and independent Sen. Angus King of Maine, who caucuses with them, agreed to end the 43-day-long shutdown by voting for a funding bill.
Their agreement came after Senate Majority Leader John Thune, D-.S.C., promised to hold a vote by mid-December on a bill of Democrats’ choosing to extend the tax credits.
But even a temporary extension of the ACA credits faces a near-impossible obstacle course to being passed into law, in part because it would require Republican support.
GOP members of Congress have long tried to gut the Affordable Care Act, which became law under President Barack Obama with only Democratic votes.
Cassidy said he is talking with other senators, as well as the Trump administration, about how his HSA plan would work.
With roughly a month to go before a planned vote, lawmakers have little time to finalize their plans before presenting them.
Yet Cassidy’s plan is already meeting with some resistance from some Democrats and health-care policy experts.
Larry Levitt, an expert with the KFF health policy research group, on Sunday responded to an interview Cassidy did with CBS’ “Face the Nation.”
“Giving ACA enrollees cash in flexible spending accounts would help with out-of-pocket health costs like deductibles,” Levitt tweeted.
“But, they wouldn’t do someone much good if they can’t afford health insurance to begin with and end up getting sick.”
On Monday, Levitt tweeted, “Without the enhanced ACA premium tax credits, people would have a harder time buying plans with affordable deductibles.”
“But, I do not believe this plan from @SenBillCassidy would cause a premium death spiral in the same way as other health account proposals that’ve been floated,” he wrote.
Death spirals occur when healthy people exit a health-care insurance plan, leading to ever-rising premiums for less healthy people who remain in the plan.
