The Clock Is Ticking For Republicans To Overhaul Health Insurance

President Donald Trump has long promised to replace Affordable Care Act with a better system—and he now has less than a month to put it in place before millions have their health insurance premiums skyrocket.

Americans have until Dec. 15 to enroll or renew coverage in Affordable Care Act health insurance plans for coverage starting Jan. 1, and have until Jan. 15 to enroll or change coverage for the year. As it stands, pandemic-era subsidies for these plans are set to expire at the end of the year, which will sharply increase premiums.

Trump and Republican lawmakers must now decide whether to overhaul the health care system, a proposal he first made more than a decade ago during his first presidential campaign. They could also extend the subsidies as Democrats have demanded, or allow health insurance premiums to rise dramatically.

The subsidies were the flashpoint in the record-setting government shutdown that ended this month. The government could be shut down again if the two sides cannot agree on the subsidies by Jan. 30.

Trump’s Proposals

Last week, Trump used social media to sketch his latest proposal for overhauling the health care system.

“The only healthcare I will support or approve is sending the money directly back to the people, with nothing going to the big, fat, rich insurance companies,” Trump wrote in an all-caps post on social media. “The people will be allowed to negotiate and buy their own, much better, insurance.”

While Trump has not released details of that plan, the White House is currently working on a proposal that would extend the current ACA subsidies while restricting people making more than 700% of the federal poverty line from receiving them. It would also require minimum payments on some currently free plans, according to reporting by several news outlets.

Removing $0 premium plans could cause many people to go uninsured, Mark Meiselbach, a health economist and professor at Johns Hopkins Bloomberg School of Public Health, wrote in an email.

“This would likely lead to large reductions in enrollment,” he wrote. “Prior work has found that there is a big difference between $0 vs. even $1, primarily due to transaction costs (e.g., having a credit card on file, paying premiums on time, etc). Those losing coverage would likely be younger and lower-income.”

Relatively few people would be affected by the new restriction on people with higher incomes. Still, it could take subsidies away from some who live in expensive states, he wrote.

Goodbye Insurance, Hello Savings Accounts

Two Republican senators—Rick Scott of Florida and Bill Cassidy of Louisiana proposed bills along the lines of Trump’s social media post.

Scott’s would allow states to replace premium subsidies with contributions to tax-advantaged health savings accounts, which beneficiaries could use to purchase health insurance or pay for services outright.

Cassidy’s plan is narrower and would leave much of the ACA in place, but convert the expiring subsidies into HSA contributions that could be used to pay for health care expenses from providers, but not premiums.

Some health care experts said the shift to HSAs could offer beneficiaries more flexibility, but could undermine the system as a whole. Health insurance companies rely on payments from younger, healthier people with few health care costs to cover the higher costs incurred by those who are older and sicker.

“The one who knows that they don’t really have any health care needs right now, they might opt to just take that money and not purchase health insurance and go off the exchange, which then leaves the people on the exchange the sickest, which is going to drive up premiums,” Meiselbach said.

The Senators’ proposals “present trade-offs, generally benefiting people who are currently healthy at the expense of people who have expensive health conditions,” Larry Levitt and Cynthia Cox, policy researchers at KFF, wrote in a blog post analyzing the proposals.