Congress races Dec. 31 clock on expiring ACA subsidies

Congress returned to Washington this week after the Thanksgiving break, and observers are waiting to see whether a health care deal will emerge by the end of the year.

The Senate is expected to vote this week on two proposals: one supported by Democrats and the other a Republican alternative.

Senate Democrats haven’t announced details of their plan publicly, but reports say the proposal would extend enhanced Affordable Care Act tax subsidies that are due to expire Dec. 31. It’s possible that some eligibility restrictions on those enhanced subsidies – something Republicans want to see – could be included.

Meanwhile, Republicans have yet to release their own version of a health care plan, but Sens. Mike Crapo of Idaho and Bill Cassidy of Louisiana are preparing that counterproposal.

Extending expiring ACA subsidies

In the House, Rep. Brian Fitzpatrick, R-Pa., is drafting a bill that would extend those expiring ACA subsidies while including some features that would appeal to GOP lawmakers.

Fitzpatrick’s proposal seeks to continue the enhanced premium subsidies that were expanded under the American Rescue Plan and Inflation Reduction Act. These subsidies currently help millions of Americans afford coverage and are set to expire Dec. 31.

Fitzpatrick’s bill also would add income limits and minimum premium payments to those who obtain ACA coverage. These eligibility restrictions would address GOP concerns about cost and fairness.

In addition, the bill would expand health savings account flexibility, which has broad support among Republicans.

New restrictions on ACA eligibility

Also in the House, Reps. Don Bacon, R-Neb., Jeff Hurd, R-Colo., Tom Suozzi, D-N.Y., and Josh Gottheimer, D-N.J., rolled out their own plan that would extend the enhanced subsidies for two years while putting new restrictions on eligibility.

The bill would provide full subsidies for families earning under $200,000 annually and phasing out for families earning between $200,000 and $300,000 annually. The proposal also adds guardrails to stop “ghost beneficiaries,” or enrollees with no claims. ACA marketplaces would be required to verify enrollee eligibility and check death records.

Agents and brokers would have stricter standards in an effort to curb fraudulent enrollment. The deadline for open enrollment would be moved to May 15 to give consumers more time to shop for coverage.

Group insurance and HSAs

Sen. Rand Paul, R-Ky., said he will introduce the Health Marketplace and Savings Accounts For All Act this week. This bill would allow any group to purchase health insurance collectively and operate across state lines.

“My plan would make it legal for Costco, Sam’s Club, or Amazon to bargain for their millions of members as a single entity, thereby driving prices down,” Paul said in an op-ed he wrote for Newsweek. “These collectives could be bigger than any corporation in America and have the size and leverage to drive health premiums down. In fact, once these co-ops are legalized, the individual market likely melts away, and everyone in America would gain the benefits that normally accrue to the group market.”

In addition, Paul said the plan would allow everyone in the U.S. to own an HSA and would allow health insurance premiums to be paid with HSA funds. Paul said since his plan involves no subsidies, there will be no direct cost to the taxpayer, and market incentives will motivate reductions in prices because the money involved is earned and owned by each individual.

An increased tax deduction for medical expenses

Sen. Josh Hawley, R-Mo., introduced a bill this week that would allow all taxpayers to deduct up to $25,000 per person in medical expenses on their federal income tax return.

Currently, only taxpayers who itemize can deduct certain unreimbursed medical expenses that exceed 7.5% of a person’s adjusted gross income. But Hawley said allowing families to deduct medical expenses in addition to the standard deduction would make that deduction available for many more families.

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Susan Rupe is editor in chief, magazine, for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected].