After 15 years, from the passage of the Affordable Care Act, Republicans have offered their own healthcare plan as an alternative to continuing ACA insurance subsidies.
In one sense, what they propose doesn’t matter. The GOP doesn’t control enough of the Senate to force through anything, unless it was part of a reconciliation process, which is restrictive and strict. Republican senators don’t have a 60-vote majority to move past the body’s filibuster rules.
However, when it comes to public policy that affects everyone’s welfare and budget, details matter because an idea might return or
The GOP Plan
There is some irony about Republicans dismissing the ACA so thoroughly for so long. Although built on the previous Massachusetts healthcare plan (which, as a Mass-based small business owner, I personally found an amazing improvement), that was based on an idea from the conservative Heritage Foundation. Near universal insurance use, with restrictions on the amount of profit and overhead insurers could extract, could provide a basis of wide coverage.
But politics often transcends reality and smart governance through opposition for its own marketing sake.
The new plan from Senate Republicans Bill Cassidy of Louisiana (a gastroenterologist) and Mike Crapo of Idaho attempts to replace the ACA subsidies that make insurance available and affordable for millions with payments into health savings accounts (HSAs).
“These pre-funded, patient-driven accounts will help Americans pay for the out-of-pocket costs that are making health care unaffordable,” the senators wrote. “The bill also directly lowers premiums by 11 percent in 2027 and beyond by providing cost-sharing reduction (CSR) payments.”
The policy details include payments into HSAs that are paired with bronze or catastrophic ACA exchange insurance plans, which means the cheapest but also ones with the thinnest coverage and the highest out-of-pocket costs. People earning less than seven times the federal poverty level (though it’s unclear whether these are complete measured on individual bases or whether household figures also come into play) would get $1,000 if aged from 18 to 49 and $1,500 if aged 50 to 64.
The money, which would not pay for much insurance over a year, would be deposited directly. This is how the plan describes the current structure:
“Democrats’ temporary Covid credits do not lower costs or premiums. They direct billions of dollars to insurance companies—20 percent of which can go to profit and overhead—and the expiration of this policy only accounts for 4 percent of the premium increase in 2026. Instead of subsidizing insurance companies, Republicans are proposing to empower patients to control their own health care.”
The funding supposedly would go to paying out-of-pocket costs and, apparently, toward paying insurance premiums. The claim of lowering premiums by 11% in 2027 and beyond, through cost-sharing reduction (CSR) payments has no data explaining how much the CSR payments would be, how they would be delivered, or who gets them.
Currently, 20% of money to insurance companies can go to profit and overhead, as that was a compromise that happened 15 years ago when the ACA was being passed. The cap was 15% in Massachusetts before then and if the amount going to care wasn’t reached, the insurance companies had to send rebates.
But shopping for insurance is expensive. Someone making $28,000 in 2025 with the ACA enhanced tax credits in place would spend no more than 1%, or $325, annually for a benchmark plan. Without the tax credits, the cost would be 6%, or $1,562, for annual coverage; $1,000 wouldn’t the insurance, let alone out of pocket expenses.
Why People Hate Insurance And Why It’s Necessary
The major problem with the GOP plan is that it wants to blame insurance companies, an emotional pitch that will reach pretty much anyone who has had to deal with them. Refusal of coverage is enough to drive someone into rage and worry about whether they will return to wellness.
And yet, insurance is necessary, whether health, car, house, or something else. The structure is common payments and unequal distribution at any time. Everyone chips in, and those who need to collect do so. Actuaries perform the statistical calculations to determine the figures and balance that will work.
Without some form of insurance — like Medicare — everyone needs the financial wherewithal to meet all their needs. That isn’t possible. Structure insurance so it works. Develop a broader national program like Medicare for All. And realize that it takes money to run such an organization and pay the people who make it work. Playing bait and switch doesn’t work.
The GOP Healthcare Plan Represents Potential Disaster
