Replace ACA tax credits with HSAs: Sen. Bill Cassidy
Senator Bill Cassidy On Monday, he proposed replacing enhanced Affordable Care Act premium tax credits with prepaid health savings accounts.
The Louisiana Republican’s proposal comes as lawmakers are trying to address the skyrocketing costs of Obamacare health insurance premiums.
The enhanced ACA tax credits that lowered the cost of Obamacare plans for nearly 20 million Americans this year are set to expire at the end of December.
Cassidy’s offer suggests that people who sign up for a so-called campaign Bronze Plan Through Obamacare marketplaces to get a prepaid HSA funded in part by expired tax credits.
While HSAs won’t help pay monthly premiums, Cassidy told reporters they will help reduce the cost of health care expenses like copays, deductibles and coinsurance.
Bronze plans generally cover 60% of the enrollee’s healthcare costs, and the enrollee is responsible for paying the remaining 40% out of pocket.
“Is there anyone who doesn’t want to take a big chunk of this money that we use to help Americans buy health care and give it directly to the individual and use 100% of that money to buy health care instead of giving it to the insurance company with 20% going to profits and overhead?” asked Cassidy, chairman of the Senate Health, Education, Labor and Pensions Committee.
The federal government shut down on October 1 and remained shut down for weeks when Senate Democrats refused to vote on the stopgap funding bill because it did not include an extension of enhanced ACA credits.
Last week, seven Democrats and the independent Senator who caucused with them, Maine King Angus, decided to end the 43-day shutdown by voting in favor of a funding bill.
The deal comes after Senate Majority Leader John Thune, D-.S.C., pledged to hold a vote by mid-December on a bill that would see Democrats opt to expand tax credits.
But even a temporary extension of ACA credits faces a nearly impossible hurdle to becoming law; That’s partly because it requires Republican support.
GOP members of Congress have long been trying to gut the Affordable Care Act, which was signed into law with only Democratic votes under President Barack Obama.
Cassidy said he has spoken with other senators, as well as the Trump administration, about how the HSA plan would work.
With nearly a month until the scheduled vote, lawmakers have little time to finalize their plans before submitting them.
But Cassidy’s plan is already facing some resistance from some Democrats and health policy experts.
Larry Levitt, an expert with the health policy research group KFF, responded to Cassidy’s interview with CBS’ “Face the Nation” on Sunday.
“Giving ACA enrollees cash in flexible spending accounts will help cover out-of-pocket healthcare costs, such as deductibles.” Levitt tweeted..
“But if they can’t afford health insurance to begin with and end up getting sick, they’re not doing anyone much of a favor.”
“Without the enhanced ACA premium tax credits, people would have a hard time buying plans with affordable discounts,” Levitt tweeted Monday.
“But I don’t believe in this plan.” @SenBillCassidy “It will result in a premium death spiral, similar to other health account offerings offered,” he wrote.
Death spirals occur when healthy people drop out of a health insurance plan, resulting in ever-increasing premiums for less healthy people who stay in the plan.
