President Trump is expected to announce a new healthcare proposal this week, primarily to avert significant premium increases due to the expiration of enhanced ACA premium tax credits. These tax credits were the key negotiating item for Democrats during the 43-day government shutdown, which ended with only a pledge by Senate Republicans to hold a vote in December to extend the subsidies. Approximately 22 million Americans may be impacted by the expiration of the tax credits.
Trump’s plan, tentatively called the Healthcare Price Cuts Act, would temporarily extend the tax credits, with new income limits for eligibility, eliminating “zero-premium” plans where consumers do not have to pay a monthly premium for coverage, and incentives for consumers to choose lower-premium plans by depositing the cost difference into tax-advantaged Health Savings Accounts.
Several lawmakers have already released proposals, including one led by the bipartisan Problem Solvers Caucus to extend subsidies for two years for families of four earning less than $200,000 per year and phasing them out for families of four earning between $200,000 and $300,000. Another proposal would extend subsidies for one-year with income caps and fraud-prevention changes and call for a longer-term solution to be negotiated next year by a commission.
Argentum has been working with lawmakers throughout the year to advocate for legislation that would help more Americans access and afford long-term care through tax reforms. Specifically, we are seeking to advance two bills as part of the year-end healthcare package:
- H.R. 138 & S. 1565, The Lowering Costs for Caregivers Act– Bipartisan legislation to allow health savings accounts and flexible spending accounts to be used by adult children on medical expenses for their parents.
- H.R. 2036 & S. 925, The Credit for Caring Act – Bipartisan legislation to establish a tax credit of up to $5,000 to help offset long-term care expenses. The amount of the credit would be 30 percent of the qualified expenses paid or incurred by the family caregiver above $2,000; the credit gradually decreases for incomes above $150,000 for joint-filers and zeroes-out at incomes of $200,000.
It is likely that this package will move very quickly through Congress, as the new ACA marketplace plans take effect on January 1, and consumers may be forced to pay significantly higher premiums if an extension is not signed into law. Senate Health, Education, Labor, and Pensions Chairman Bill Cassidy (R-LA) is leading negotiations in the Senate. He is also the primary Republican sponsor of the Lowering Costs for Caregivers Act and has long-championed expanding the use of HSAs and FSAs.