How to Fix Obamacare? Here’s What the Trump Administration Is Discussing

Last September, President Donald Trump sparked a viral moment when he told millions of voters at a presidential debate that he had “concepts of a plan” for how to deal with healthcare.

Trump’s White House — and the Republican party — are now under increasing pressure to formulate that plan before Affordable Care Act tax credits expire at the end of this year, spiking premiums for millions of Americans. The push is coming at a pivotal moment: affordability has taken center stage since Republicans suffered losses in November’s elections and the White House is facing pressure on the issue on all fronts, from housing and food prices to healthcare.

“I don’t think that the White House is just now waking up and realizing healthcare is an issue, but I think they realize it is one where you need to tread carefully,” said Alex Conant, a Republican strategist.

Trump health officials and the White House’s Domestic Policy Council are reviewing a number of plans to address healthcare costs, though few details have been publicized and it’s unclear how close they are to rolling out a potential replacement. But the power, and ultimate decision making, for now seems to be concentrated there instead of other federal agencies or Congress.

While a White House official told NOTUS Friday that the healthcare policy team have been “consistently” meeting on Obamacare since the beginning of Trump’s second term and that conversations by necessity have at times focused on the expiring subsidies, one separate administration official told NOTUS that it’s “business as usual” among the groups that would typically write new healthcare policy at the Department of Health and Human Services and no formal talks have been set up “to look at this issue,” inside the agency.

The White House did not respond to a request for comment.

At the White House, top aides like Vince Haley, the Director of the Domestic Policy Council and Heidi Overton, are involved, according to a senior White House official. Dr. Mehmet Oz, Administrator for the Centers for Medicare & Medicaid Services, are among those involved in these discussions.

The most widely-discussed option — and the question Democrats tried to leverage with a shutdown — is whether to extend the ACA tax credits that are set to expire at the end of this year.

“The president’s willing to look at all options. But we have some major flaws with the way these COVID era subsidies were added,” Dr. Oz told CNN in an interview on Sunday. “I am promising the president is laser-focused on this. It’s the main thing I talk with him about. Congress as well is all over this.”

While Republicans (and Trump himself) have long expressed a desire to reform or replace the Affordable Care Act, extending the ACA tax credits summarily avoids the political liability that comes with premiums spiking, at least beyond the midterms. But how to get there, with Obamacare being deeply woven into the fabric of the American healthcare system, has always stumped the party.

One option gaining steam among Republican officials (and lobbyists working on the issue) is tax free savings accounts, like HSAs and FSAs, where government subsidy money is given to the consumer instead of the insurance company.

Sen. Bill Cassidy, chair of the Senate Health, Education, Labor, and Pensions Committee has backed putting the enhanced premium tax credit dollars into FSAs — and said there’s ‘a lot of support’ for it in the conference.

“I was pleased to say the president basically tweeted and supported the concept,” Cassidy told reporters on Nov. 10. “He spoke of health savings accounts, but for a variety of reasons, I think a flexible spending account is better. And the President kind of endorsed, most of all giving money to the patient.”

Trump said in a post to Truth Social that he was recommending Senate Republicans give government subsidies directly to consumers as opposed to health insurance companies.

On Sunday, Trump reiterated his support for paying money directly to consumers, and said that he had been discussing the plan with members of Congress — including some Democrats.

“We’re going to take the money — well, if it gets approved — we’re going to take the money, we’re going to pay it back to the people of our country to go out and buy health insurance,” Trump said. “Now they can put it in a health account. We can do it a lot of different ways, but they buy their own health insurance. They can negotiate price, and it’s going to be locked so they can’t go out and buy a Cadillac. They can go out and buy health insurance.”

The plan mirrors an HSA option being pushed by Paragon Health Institute, a health policy think tank headed up by Brian Blase, the Special Assistant to the President for Economic Policy at the White House’s National Economic Council during Trump’s first term.

Language for cost-sharing reductions meant to provide financial assistance for low-income enrollees was initially included in the House passed reconciliation bill this summer, but stripped by Senate procedure before final passage. The Trump administration stopped payments for it in 2017, complying with a court order but it led insurers to hike prices on certain plans, per KFF. The cost reducing mechanism could come back into focus, now that a solution to stop premiums spiking is a top priority.

“I believe the White House is supportive of this CSR appropriation,” Blase, whose company published the policy more than three years ago, told NOTUS. “As far as the HSA option. I mean, it’s very consistent with the President’s direct policy direction.”

This would complement Trump’s demands.

“There are a bunch of policies that could fit into moving money from the insurance company to the patient,” Blase said. “One of the questions is: what restrictions would you put on people that get that subsidy from the government? And that’s a big question, and [would need] some time to sort out.”

And another option is making no real changes at all. A Senior White House Official told NOTUS that the president has not ruled out an extension of the expiring tax credits.

The administration official told NOTUS that for months, ideas have floated around HHS about how to give money back to enrollees who were already facing high premiums. And another source familiar said Republicans on the Hill have been planning to include health care in a second reconciliation that could pass before the midterm elections, including ways to shore up housing and other issues meant to strike directly at voters’ affordability concerns.

Ultimately, any changes will have to be passed by the House and Senate, where the work has already begun. After the government shutdown, where Democrats relented in their demands for ACA tax credits to be addressed in the continuing resolution, both Democrats and Republicans emerged with purpose.

In addition to a vote on extending the subsidies, one of the concessions Senate Democrats got in exchange for their vote on the CR, House Democrats made plans to use a discharge petition to force a vote on healthcare reform.

Some Senate Republicans emerged from the shutdown saying they wanted to get rid of Obamacare all together. Many acknowledged that something had to be done to mitigate the pain of rising premiums.

Still, the White House holds a lot of sway in the matter, too. Gregg Fann, a consulting actuary at Axene Health Partners, told NOTUS the role of the president and the executive in shaping healthcare policy is underappreciated.

“This should not be a binary discussion of yes or no,” he said. “It should be a real review of how to get people to have insurance. Who are we over subsidizing, and who are we under subsidizing? Can we do a better job and really have a more just and equitable system of structuring this.”

Though there is real need for healthcare policy reforms, acknowledged by both parties and the President, Fann is skeptical that either party is thinking that way.

“The parties are looking for political wins, they’re not looking for coverage, they’re not looking for efficiency, they’re not looking for the best policy, which is why I think I’m skeptical,” he said.