President Trump as soon as this week is due to outline a new initiative that calls for a short-term extension of Affordable Care Act subsidies in exchange for new eligibility limits and other changes.
Why it matters: Mounting concern about medical costs and the looming expiration of enhanced ACA tax credits could amp up affordability concerns and give Democrats a potent weapon heading into an election year.
- Democrats made ACA financial assistance a centerpiece of the recent government shutdown fight.
What we're hearing: Trump plans to propose a framework that would address spiking premiums by extending for two years the enhanced ACA tax credits, which are due to expire at the end of the year, according to sources familiar, speaking anonymously because of the sensitivity of the talks.
- It would put an income limit on who's eligible for the tax credits and require recipients to make a minimum premium payment, eliminating $0 premium plans that Republicans say fuel fraud.
- The plan also would encourage people to buy lower-premium options on the ACA exchange.
- For individuals who downgrade their coverage, the difference in costs would be distributed to an health savings account provided with taxpayer dollars.
Still unresolved in the larger battle over the subsidies is whether there would be new prohibitions on using any financial assistance for elective abortions.
- Adding Hyde Amendment language to any deal would be highly controversial, with Democrats insisting there's already a mechanism to segregate taxpayer funds so they're not used to pay for the procedure.
- Treasury Secretary Scott Bessent appeared on NBC's "Meet the Press" on Sunday and teased that an announcement on health care costs would come this week.
Context: Trump recently has been adamant about not signing a straightforward extension of ACA subsidies, saying the money should be directed away from insurance companies and sent directly to consumers to shop for health services.
- Sens. Bill Cassidy (R-La.) and Rick Scott (R-Fla.) have proposed ACA subsidy alternatives in recent weeks that would use tax-privileged savings accounts.
The White House and Department of Health and Human Services did not respond to requests for comment.
- MS NOW was the first to report the existence of the new Trump plan.
Go deeper: Trump admin pushes back on rising health care costs
