Sen. Bill Cassidy on Monday proposed replacing the Enhanced Affordable Care Act’s premium tax credit with a prepaid health savings account.
The Louisiana Republican proposal comes as lawmakers scramble to find relief for soaring Obamacare health insurance premiums.
Expanded ACA tax credits that lowered the cost of Obamacare plans for about 20 million Americans this year are set to expire at the end of December.
Mr. Cassidy’s proposal would allow people who signed up for so-called bronze plans through the Obamacare Marketplace to obtain a prepaid HSA funded in part by the expired tax credits.
Cassidy told reporters that HSAs won’t help you pay your monthly premiums, but they will help reduce medical costs such as copays, deductibles and coinsurance.
Bronze plans typically cover 60% of enrollees’ medical costs, with enrollees paying the remaining 40% out-of-pocket.
“Who wouldn’t want to give a larger portion of the money we spend to help Americans buy health care, with 100 percent of it going directly to individuals, instead of going to insurance companies, where 20 percent goes to profits and expenses?” asked Cassidy, who chairs the Senate Health, Education, Labor, and Pensions Committee.
The federal government shut down on October 1 and remained shut down for several weeks after Senate Democrats refused to vote on the emergency funding bill, which did not include expanded ACA lending.
Last week, seven Democrats and Maine Independent Sen. Angus King, who caucuses with them, agreed to vote in favor of the funding bill to end the 43-day shutdown.
The agreement came after Senate Majority Leader John Thune (D-S.C.) promised a vote by mid-December on a bill that Democrats chose to extend the tax credit.
But even a temporary extension of ACA credits faces near-impossible obstacles to passage, in part because it would require Republican support.
Republican lawmakers have long sought to water down the Affordable Care Act, which was passed under President Barack Obama with only Democratic votes.
Cassidy said he is in discussions with the Trump administration as well as other senators about how the HSA plan would work.
With about a month until the scheduled vote, lawmakers have little time to finalize the plan before submitting it.
But Cassidy’s plan is already running into resistance from some Democratic lawmakers and health policy experts.
Larry Levitt, an expert with the KFF Health Policy Research Group, said Sunday in an interview with Cassidy on CBS’ “Face the Nation.”
“Providing ACA enrollees with cash in flexible spending accounts would help reduce out-of-pocket health costs, including deductibles,” Levitt tweeted.
“But they’re not going to do much good for the person if they can’t afford health insurance in the first place and end up getting sick.”
“If the ACA Premium Tax Credit is not strengthened, it will be harder for people to buy plans with affordable deductibles,” Levitt tweeted Monday.
“However, I do not believe this plan by @SenBillCassidy will cause a premium death spiral in the same way as other healthcare account proposals that have been proposed thus far,” he wrote.
A death spiral occurs when healthy people drop out of their health insurance plans, and premiums continue to rise for those in poor health who remain on their health insurance plans.
