With the government shutdown behind them, members of Congress now turn their attention to a contentious question that helped precipitate the crisis: what becomes of the enhanced health care subsidies enacted during the coronavirus pandemic.
Senator Bill Cassidy of Louisiana, chairman of the Health, Education, Labor and Pensions Committee, has advanced a proposal that would fundamentally alter how these federal dollars reach American families. Rather than channeling subsidies through insurance companies, Cassidy’s plan would deposit funds directly into Health Savings Accounts controlled by patients themselves.
The enhanced premium subsidies, which have helped millions of Americans afford coverage under the Affordable Care Act, are scheduled to expire at the end of this year. The impending deadline has created urgency on both sides of the aisle, though the parties remain far apart on solutions.
Cassidy told reporters this week that he has been working with members of both parties to develop his alternative approach. The Louisiana Republican believes empowering patients with direct control over health care dollars would lower costs while preserving access to care.
“Some think that consumer-driven health care has to be funded out of the paycheck,” Cassidy explained. “I’m saying no, it’s going to be pre-funded with money that would otherwise go to the insurance companies.”
During the shutdown negotiations, Senate Minority Leader Chuck Schumer proposed extending the existing subsidies for one year. Republicans swiftly rejected that plan. Senate Majority Whip John Barrasso of Wyoming took to the Senate floor to articulate his party’s objections, arguing that simply extending the current system fails to address underlying cost problems.
“The American people deserve quality, affordable health care, and they haven’t gotten that with Obamacare,” Barrasso said. “Reforms are needed that actually lower costs, that protect the taxpayers. Senator Schumer’s offer does nothing to address the cost of health care, does nothing to lower premiums, does nothing to reassure the American people.”
Barrasso characterized the Democratic proposal as a plan that “makes insurance companies richer and taxpayers poorer.”
As part of the agreement that ended the shutdown, Senate Majority Leader John Thune of South Dakota committed to holding a vote on some form of health care proposal by the second week of December. The specifics of what legislation will receive a vote remain uncertain.
House Minority Leader Hakeem Jeffries of New York has warned that allowing the subsidies to expire would result in “dramatically increased premiums, copays, and deductibles” for tens of millions of Americans. Jeffries has pushed for a three-year extension of the current subsidy structure, though such a proposal appears to have little chance of passage in the Republican-controlled Senate.
Speaking on the Senate floor last week, Cassidy framed his proposal as a departure from what he characterized as the Affordable Care Act’s failed approach of “throwing billions” at insurance premiums without addressing the underlying cost of medical care itself.
The debate reflects a fundamental disagreement between the parties about the proper role of government in health care markets and whether federal assistance should flow through insurance companies or directly to consumers. With the December deadline approaching, Congress faces pressure to reach some form of compromise before millions of Americans see their health insurance costs rise substantially in the new year.
Related: Ocasio-Cortez Declines to Support Far-Left Effort to Unseat Hakeem Jeffries
