While there’s not a consensus yet, House Speaker Paul Ryan and Trump’s nominee for Health and Human Services Secretary Tom Price have both put forward plans in the past that would offer substantial tax credits to individuals who don’t get insurance through work to help pay for care.
Those subsidies, while structured differently than the ACA’s (they rise with age, rather than income), could grow more generous if Republicans bring Democrats into the room to negotiate a final deal. But any deal that substantially raises spending would enrage conservative activists, some of whom already consider plans that include tax credits “Obamacare-lite.”
“I don’t think there’s a market for reducing subsidies in the aggregate, but the type of subsidies will change,” said Thomas P. Miller, a scholar at the American Enterprise Institute and conservative critic of Obamacare.
The biggest issue is how to pay for it all. The ACA is financed by a mix of cuts to Medicare Advantage providers, taxes on the medical industry and on high-end insurance plans, and taxes on wealthier Americans. These sources bring in enough cash that the law is actually projected to reduce the deficit by $350 billion over the next decade, despite large increases in health care spending.
Republicans, who have long complained that the ACA is too expensive, already have some tough decisions coming up in the initial repeal bill. Republican candidates routinely criticized the law’s Medicare cuts in prior elections, but they’re expected to keep them to finance their plan. However, the initial repeal could wipe out the law’s tax provisions, which would dramatically reduce the pool of money available to preserve Obamacare’s coverage gains.
Join the conversation as a VIP Member