Mike Crapo

Two Republican lawmakers have put forward legislation that would deposit $1,000 to $1,500 checks into health care accounts for Americans.

Why It Matters

Health care costs for an estimated 23 million Americans are scheduled to rise starting in January as lawmakers remain deadlocked over whether to renew the Affordable Care Act (ACA) tax credits set to expire on December 31.

Democrats are pushing to extend the credits for two or three years, while Republicans are advancing several alternative proposals.

Democrats are poised to get a Senate vote later this week on their plan to extend the enhanced ACA subsidies. The proposal is expected to fail, lacking the Republican support needed to pass, but the GOP agreed to hold the vote after Democrats insisted on it as a condition for reopening the government during the record-breaking federal shutdown that ended last month.

What To Know

Louisiana Senator Bill Cassidy, who chairs the health committee, and Idaho Senator Mike Crapo, head of the finance panel, unveiled their proposal on Monday.

"Americans cannot afford health care. They need a serious solution that provides real relief to a broken system," a summary seen by Newsweek reads. "In line with President [Donald] Trump’s call, Republicans propose redirecting money going to insurance companies back to patients."

Under the outline, ACA enrollees earning below 700 percent of the federal poverty level would receive $1,000 in a Health Savings Account (HSA) if they are between 18 and 49, and $1,500 if they are 50 to 64.

An HSA is a tax-advantaged savings account that people can use to pay for qualified medical expenses. It is typically paired with a high-deductible health plan. Money contributed to an HSA isn’t taxed, it grows tax-free, and withdrawals for eligible health care costs are also untaxed. Users can roll over unused funds from year to year, allowing the account to grow over time.

The funds would not be eligible for use on abortion or gender transition services.

The plan would also fund ACA cost-sharing reduction payments, which would help lower overall premiums but reduce subsidies for some enrollees. Additional provisions would broaden access to low-cost “catastrophic” plans and reduce Medicaid funding for states that offer coverage to undocumented immigrants.

Trump's Call On Health Care

The senators' proposal also fulfills Trump’s call to convert those subsidies into direct payments to Americans. He wants the enhanced ACA subsidy funds redirected into health savings accounts that Americans can use for out-of-pocket expenses.

“I want to give the people better health insurance for less money,” he told Politico this week. “The people will get the money and they’re going to buy the health insurance that they want.”

Republicans have submitted competing plans. Senator Bernie Moreno, an Ohio Republican, jointly introduced the Consumer Affordability and Responsibility Enhancement (CARE) Act, which would provide a temporary ACA Premium Tax Credit extension and give Americans a two-year path off the coronavirus-era credits.

“Some of our folks who are working on this issue are trying to come up with something that unites Senate Republicans,” Senate leader John Thune, a Republican, said last week, adding that there are “consultations going on all the time with the White House.”

What Happens Next

It remains unclear whether the Cassidy-Crapo bill will gain backing from the 53-member Senate Republican conference, which is set to review this and other proposals on Tuesday during a closed-door lunch.