Centers for Medicare and Medicaid Services Administrator Dr. Mehmet Oz indicated enhanced subsidies under the Affordable Care Act may be extended after all.
In an interview Sunday on CNN’s State of the Union, he was asked if there are any conversations about extending them, even on a short-term basis, given that insurance costs will more than double if the new year begins without the subsidies.
“There are discussions around extending the subsidies, if we deal with the fraud, waste, and abuse that right now is paralyzing the system,” he replied.
Oz added that there are also ways to put money “in the pockets of Americans,” alluding to President Donald Trump’s suggestion earlier that direct payments could take the place of tax credits that currently offset the cost of insurance on ACA marketplaces.
He also said Trump’s tax-and-spending package initially had provisions for cost-saving tools that would have cut premiums by 10%, but Democrats pushed to have them removed.
“So they’re already ideas we’ve put out there,” Oz said, stressing that he is looking at ways to make the system sustainable for decades.
The enhanced ACA subsidies, which were enacted during the pandemic, were the key sticking point during the government shutdown with Democrats demanding, but failing, to get them.
Meanwhile, the off-year elections this month that delivered stunning losses to Republicans brought the issue of affordability front and center.
Trump has already rolled back some of his signature tariffs to help lower grocery prices, and efforts to come up with ways to curb healthcare costs are heating up.
House Republicans have started working on their own package that’s meant to reduce costs, though it’s unlikely to extend ACA subsidies, sources told CNN this past week.
At the same time, the report also said the White House is ramping up a push to develop a new healthcare plan that would overhaul the ACA, which Trump tried unsuccessfully to repeal and replace in his first term.
On Sunday, Oz said “there are many ideas out there,” including some that will replace the ACA and some that will not. He highlighted the role of reinsurance and prescription drug pricing in lowering costs.
Such efforts would likely take months of legislative work. But in a matter of weeks, consumers of ACA insurance plans must start paying premiums that are skyrocketing.
“I promise you the president is laser focused on this,” Oz said. “It’s the main thing I talk with him about. Congress as well is all over this. We have got to find solutions that don’t just work at the end of this year but work for years to come.”
While Democrats have been advocating to extend the ACA subsidies, letting them expire would disproportionately affect Republican states, particularly in the South.
Of the 10 states with the highest share of the population receiving subsidies, eight are in the South and voted for Trump last year. They include Florida, Georgia, Texas, Mississippi, South Carolina, Alabama, Tennessee and North Carolina. The other two states in the top 10, Utah and Wyoming, are also Republican states.
The Congressional Budget Office has estimated that extending the ACA subsidies would cost $35 billion per year. Meanwhile, letting them expire would result in about 4 million more people becoming uninsured by 2034, CBO said.
In addition to the fiscal costs, there could be political costs if voters see their health insurance bill soar.
“While a relatively small share of the national population gets their coverage through the ACA Marketplaces, in some districts, the number of ACA enrollees could be enough to swing a close election,” KFF said last month.
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