As the Covid-era tax credits for health insurance premiums are set to expire at the end of the year, millions of Americans are bracing for a significant increase in their healthcare costs. In response, Republicans in Congress are considering using a partisan tactic to force through direct cash payments to help Americans defray these costs. The idea, which was recently floated by President Donald Trump, involves using tariff revenue to fund these payments. However, the plan is facing skepticism from some lawmakers, who question whether it can pass through both the House and Senate.
Trump’s proposal involves giving Americans direct cash payments to purchase their own healthcare, which he claims will lead to better and more affordable healthcare. However, most people do not purchase insurance individually, but rather through an employer or the Affordable Care Act exchange. The plan would essentially give Americans their own money back in the form of meager cash payments, which may not cover the higher premiums they will have to pay after the ACA subsidies expire.
Some Republicans, including House Ways and Means Committee Chair Jason Smith, are skeptical of the plan, citing the difficulty of passing a reconciliation bill through both chambers. Representative Mike Lawler, a New York GOP moderate, has endorsed extending the Obamacare subsidies instead, and Senator Lisa Murkowski has expressed concerns about using the partisan reconciliation process.
However, other Republicans, including the chairs of the House and Senate budget committees, are more bullish on the prospect. They believe that there is a “critical mass” to start the reconciliation process and that a bill focused on healthcare, immigration enforcement, and military funding could pass. The White House has also expressed support for the idea, with Deputy Chief of Staff for Policy James Blair suggesting that tariff “dividends” of around $2,000 per person could be included in a reconciliation bill.
Despite the support, the plan faces significant hurdles, including strict rules around what can be included in a reconciliation bill. The process can only be used for taxation and spending provisions, and policy changes unrelated to budgeting are not allowed. Additionally, the plan would require figuring out what Trump wants and going along with it, which could be a challenge. Ultimately, the fate of the plan remains uncertain, and it is unclear whether it will be able to pass through Congress.