Trump Opens The Door To Obamacare Subsidy Extension

President Donald Trump on Tuesday suggested he was open to extending Obamacare subsidies that are set to expire at the end of the year if it would give Congress time to make changes that he supports to the federally run health care plan.

“Some kind of an extension may be necessary to get something else done, because the unaffordable care act has been a disaster,” Trump told reporters on Air Force One, referring to Obamacare’s official name, the Affordable Care Act.

The president in recent weeks has backed a plan to give money directly to Obamacare enrollees through health savings accounts, diverting federal funds from enhanced subsidies that lower insurance premiums.

“Don't give any money to the insurance companies. Give it to the people directly, let them go out, buy their own health care plan,” Trump said again Tuesday. “We're looking at that.”

Though his comments left the door open to a narrow extension of the subsidies to work out the details of a plan involving HSAs, the president also knocked down a plan floated by the White House as recently as Sunday that would extend the subsidies for two years.

“Somebody said I wanna extend them for two years. I don't want to extend them for two years. I'd rather not extend them at all,” Trump said.

The proposal the administration had planned to roll out this week — but which was never formally announced — consisted of a two-year extension of the ACA’s enhanced subsidies with new limitations favored by conservatives, such as an income cap and elimination of free plans, according to three people granted anonymity to discuss the unannounced proposal.

That plan also included an option for enrollees to receive part of their tax credit in a tax-advantaged savings account if they opted for an insurance plan with a high deductible — mirroring a proposal laid out by Louisiana Republican Sen. Bill Cassidy, chair of the Health, Education, Labor and Pensions Committee — which Trump appeared to still support Tuesday.

“You give the money to the people. I like it the best,” Trump said. The president said he was speaking to Democrats, too, about a health savings account proposal, though no Democrats have yet confirmed conversations with the president.

“I can't tell you who, but we have — a lot of Democrats want to see this plan happen,” he said.

An HSA cannot be used to pay an insurance premium, but it can be applied to a deductible or co-pay. Because of that, Trump’s plan would likely not directly address the roughly 114 percent increase, on average, to their out-of-pocket premium costs that Americans face when the enhanced subsidies expire at the end of the year.

The enhanced subsidies were first created by a Democratic Congress in 2021 under President Joe Biden to further lower the costs of Obamacare premiums during the pandemic. They made some plans free for lower-income people and also extended subsidies to people earning more than 400 percent of the poverty level.

No Republicans voted for it. Democrats extended the enhanced subsidies in a 2022 law, but set them to expire at the end of this year to make the budget math work.

The Congressional Budget Office, a nonpartisan scorekeeper, projects that a 10-year extension of the subsidies now would cost $350 billion.

If they expire, subsidies would revert to their original 2010 levels.

As part of a deal to reopen the government earlier this month, a fight staked on rising premiums, Senate Republicans agreed to give Democrats a vote on the enhanced subsidies in December.

But GOP lawmakers across the Capitol are divided over how to respond to the subsidy deadline, with some concerned about increasing costs to enrollees and others opposed to Obamacare as a whole — leaving many eager for Trump to reveal his preferences.

Still, many Republicans on Capitol Hill weren’t pleased this week when they heard Trump would propose a two-year extension. The White House had considered announcing the plan on Monday but shelved the idea under pressure.