As the clock ticks toward mid-December, Republicans are scrambling to craft a viable alternative to the enhanced subsidies provided by the Affordable Care Act (ACA). This urgency stems from a self-imposed deadline to present a new plan that aligns with President Donald Trump’s vision of directly channeling ACA subsidy funds to consumers.

Throughout the recent government shutdown, Republicans steadfastly resisted engaging in negotiations with Democrats regarding health care. However, the looming expiration of these subsidies has prompted them to explore their own solutions, despite the inherent political risks involved.

The proposals currently being floated remain somewhat nebulous. Health care experts caution that any plan to provide cash directly to consumers could potentially destabilize the insurance marketplace. Such an approach might encourage healthier individuals to forgo coverage, opting instead to use the cash to cover their limited out-of-pocket expenses. This could result in a “death spiral,” where only the sicker, more costly patients remain insured, driving premiums to untenable levels.

As Republicans work against the clock, here’s what you need to know about their efforts to reshape the future of health care subsidies.

Here’s what to know about the push:  

Trump complicates talks

Trump on Tuesday told Congress not to “waste” time on an extension of the enhanced subsidies, taking a harder line against them at a time when some lawmakers are looking for a bipartisan compromise.  

“THE ONLY HEALTHCARE I WILL SUPPORT OR APPROVE IS SENDING THE MONEY DIRECTLY BACK TO THE PEOPLE,” Trump wrote Tuesday on Truth Social. 

Trump said people could “buy their own, much better, insurance” and doubled down on his idea to send money directly to consumers.  

Over the weekend, Trump said he’d had “personal talks with some Democrats” about his direct health care payment plan. 

“The insurance companies are making a fortune,” Trump told reporters in Florida. “Their stock is up over a thousand percent over a short period of time. They are taking in hundreds of billions of dollars, and they’re not really putting it back, certainly like they should.” 

It’s not clear what Trump’s plan is. Giving people money to buy health insurance is how the Affordable Care Act exchanges work. 

But he insisted, “This is the only way to have great Healthcare in America!!! GET IT DONE, NOW.” 

Cassidy has a plan

Sen. Bill Cassidy (R-La.) unveiled a plan to use untaxed Health Savings Accounts (HSA) to help consumers pay out-of-pocket expenses.  

Cassidy’s plan is not the official Republican position, and he hasn’t released legislation. But it aligns with Trump’s demand to end the enhanced subsidies and send money directly to consumers. 

“I can say that if you look at the broad outlines of what I’m speaking of, it is clearly the broad outlines of what the president is speaking of,” Cassidy said. “If you’re going to get it done by 2026, then you got to accept that which you’ve got to work with. And so it kind of pushes everybody in the same direction.” 

As chair of the Senate Health, Education, Labor and Pensions Committee, Cassidy is among a group of Republicans tasked with negotiating the future of the enhanced subsidies with Democrats ahead of a mid-December vote.   

Cassidy said his proposal would allow people who purchase bronze plans on the ObamaCare exchanges to receive a prepaid Health Savings Account, funded in part by the lapsed enhanced subsidies.   

Bronze plans have lower premiums but higher deductibles. They are the only ObamaCare plan eligible for HSAs; Trump’s tax bill changed the rules so that all bronze plans are eligible for HSAs starting Jan. 1.  

HSAs can’t be used to pay for monthly premiums, and critics argue that they won’t help if someone can’t afford the underlying cost in the first place. Cassidy said he doesn’t have a cost estimate, and he hasn’t worked out how to allocate the HSAs to consumers.  

But Cassidy said his proposal would lower overall costs because when people are empowered to shop for their own care, they drive down prices.

Clock is ticking

Despite Trump’s comments Tuesday, lawmakers said they aren’t necessarily ready to give up bipartisan negotiations. But time is running out. 

Senate Majority Leader John Thune (R-S.D.) promised Democrats a vote in the second week of December, and the enhanced tax credits expire at the end of the year. 

Any legislation that would pass this year will need 60 votes in the Senate to overcome a filibuster. 

Rep. Don Bacon (R-Neb.) said the only way to avoid a major premium spike is to do a one-year extension of the enhanced subsidies with minor changes to appease conservatives and make bigger reforms later. 

“I think there should be better solutions down the road, but we got to make a decision pretty quick. Otherwise, people’s premiums are going up,” Bacon said. “I don’t see another way out, other than some kind of modified tax credits.” 

Thune on Tuesday acknowledged he wasn’t sure if Trump’s comments effectively shut the door on bipartisan negotiations on a subsidy extension.  

“The question is going to be, would the Democrats accept applying Hyde to any changes and reforms that might be made?” Thune said, referring to GOP demands for stricter anti-abortion limits for the subsidies. “We’ve got members, and a lot of members, who are very interested in addressing the affordability of health care. The question is, what’s the best way to do it, and can it be done in a way that is bipartisan?” 

The health advocacy coalition Keep Americans Covered (KAC) said in a briefing Tuesday that while different ideas on health insurance affordability are welcome, extending the enhanced ACA tax credits is the only realistic, viable option. 

Open enrollment has been in effect for more than two weeks now, and customers have roughly a month to sign up if they want coverage at the start of next year. 

“We understand there are other reforms and elements of the health care system that lawmakers want to address. The families who rely on health care tax credit do not have time to wait for Congress to figure this out. They need action right now, or these families and small-business owners will pay the price,” said Lauren Aronson, KAC’s executive director.