Healthcare Update

Millions of Americans could face significantly higher health insurance costs next year due to the scheduled expiration of the ACA enhanced premium tax credits. While many Republicans are concerned about the potential impact on their prospects in the mid-term elections, the majority remains undecided on any course of action. Initially, President Trump stated he would not support extending the ACA subsidies. However, reports surfaced last week indicating that the White House was preparing a proposal to extend the subsidies for two years, with new limits on eligibility and an option to receive part of the credit in a Health Savings Act (HSA). This plan faced strong opposition from the more conservative wing of the Republican party, leading the White House to quickly retract the proposal.

Even if Republicans could agree on a strategy to reduce healthcare costs without extending the credits, there isn't enough time to utilize the budget reconciliation process for a partisan reform package before the end of the year. Consequently, any solution Congress could enact before the credits expire would require bipartisan support, including an extension of the credits with reforms to limit eligibility. Such a compromise bill is unlikely to garner sufficient Republican support to pass both chambers unless President Trump advocates for it, and even then, it would likely need significant Democratic votes.