White House Working On Plan to Extend Health Care Subsidies

The White House is circulating a proposal that would extend subsidies to help consumers pay for coverage under the Affordable Care Act for two more years, as millions of Americans face spiking health care costs when the current tax credits are set to expire at the end of the year, the AP reports. The draft plan suggests that President Trump is open to extending a provision of Obamacare as his administration and congressional Republicans search for a broader policy solution to a fight that has long flummoxed the party. The White House stresses that no plan is final until Trump announces it. The subsidies were at the heart of the Democrats' demands in the government shutdown fight that ended earlier this month. Most Democratic lawmakers had insisted on a straight extension of the tax credits as a condition of keeping the government open.

Eligibility for the Obamacare subsidies, which were put in place during the COVID-19 pandemic to help people afford health care coverage, would be capped at 700% of the federal poverty level, according to two people with knowledge of the proposal. The baseline tax credits that were originally part of the Affordable Care Act were capped at 400% of the federal poverty level, but that cut-off was suspended because of the temporary COVID-era credits that allowed middle- and higher-income people to benefit from subsidies too. The White House would also require those on Obamacare, regardless of the type of coverage, to pay some sort of premium for their Obamacare plans. That would effectively end zero-premium plans for those with lower incomes, addressing a concern from Republicans that the program has enabled fraud.

As the White House worked quietly on its plan, led by the Domestic Policy Council, key lawmakers on Capitol Hill have drafted their own proposals. For instance, Florida Sen. Rick Scott, Louisiana Sen. Bill Cassidy and others have proposed various ideas for redirecting the program's spending on federal subsidies into health savings accounts that enrollees could use to shop for plans or defray out-of-pocket costs. Scott's plan has been discussed with the White House multiple times since it was released Thursday, according to a person familiar not authorized to discuss the private conversations. Sources tell CNN that some Republicans are "balking" at Trump's plan even though it has yet to be officially released, and that the administration delayed announcing the plan due to the GOP pushback.