The White House is preparing a proposal that would extend Affordable Care Act (ACA) subsidies for another two years, as millions of Americans fear rising health care costs when current tax credits expire at the end of the year.
The draft plan suggests that President Donald Trump is willing to expand Obamacare credits as his administration and congressional Republicans seek a more definitive solution. The White House stressed that no plan is final until Trump announces it.
The subsidies were at the center of Democrats’ demands in the government shutdown dispute that ended earlier this month. Most Democrats had insisted on an extension of Obamacare tax credits as a condition of keeping the government open.
Eligibility for Obamacare subsidies, which were implemented during the COVID-19 pandemic to help people afford health coverage, would be limited to 700% of the federal poverty level, according to two people with knowledge of the proposal. The sources spoke on condition of anonymity to discuss a White House proposal that is in the draft phase.
The basic tax credits that were originally part of Obamacare were capped at 400% of the federal poverty level, but that cap was suspended due to temporary pandemic credits, which allowed middle- and high-income people to also benefit from the subsidies.
Under the plan being discussed, the White House would also require Obamacare beneficiaries, regardless of the type of coverage, to pay some type of premium for their plans. That would eliminate zero-dollar premium plans for low-income people, addressing a Republican concern that the program has enabled fraud. One option is to require everyone to pay 2% of their income, or at least $5 a month, for the lowest-tier plans.
Although the White House proposal is subject to change, the idea of somehow preserving access to Obamacare, former President Barack Obama’s signature legislative achievement, will likely irritate conservatives who have been trying to repeal and replace the law for more than a decade.
“Until President Trump makes an announcement himself, any information about the Administration’s positions on health care is mere speculation,” White House spokesman Kush Desai said Monday.
White House press secretary Karoline Leavitt told reporters Monday afternoon that Trump “is very involved in these conversations” and that he “is focused on putting forward a health care proposal that will fix the system and reduce costs for consumers.”
However, there are signs that some parts of the nascent White House plan could have support from Democrats. New Hampshire Senator Maggie Hassan, one of eight members of the Senate Democratic caucus who voted in favor of reopening the government earlier this month, said it “represents a starting point for serious negotiations.”
“The fact that President Trump is making any offer to expand the Affordable Care Act tax credits demonstrates that there is broad consensus that inaction in this regard will cause serious harm to the American people,” Hassan stressed.
