A unified Republican government could bring tangible changes to the U.S. healthcare system.
It’s one of several issues that will get legislative attention during President-elect Donald Trump’s second, nonconsecutive term, with Republicans continuing to hold the House and a Senate GOP majority in place after the party’s four-year minority run.
For over a decade, the Republican Party promised to repeal Obamacare. The GOP likely won’t try it again after a failed attempt in 2017, during Trump’s first term. Trump and congressional Republicans came up short, even with GOP majorities in the House and Senate.
That’s the same situation as the one now, though by an even narrower House majority than eight years ago — effectively a slim 220-215 GOP edge over Democrats, once special elections are held for open seats that are strongly red.
Instead of sweeping healthcare changes, Trump, working with Republican congressional leaders, will likely try to retool Obamacare and use regulatory agencies such as the Food and Drug Administration and the Centers for Disease Control and Prevention to make changes elsewhere.
One option Republicans will explore is changing the funding formula for Medicaid. Expansion has proved costly, and Republicans could change the formula, reducing the burden on the federal government. This change would primarily affect higher-income adults who do not have children.
There is also GOP support to allow Obamacare subsidies for healthcare plans that do not comply with the 2010 healthcare law, the signature domestic achievement of former President Barack Obama’s administration. The idea is that younger, healthier people could purchase less expensive plans that reduce monthly premiums but offer skinnier coverage. Coupled with that is the idea of expanding health savings account contribution limits. HSAs allow people with high deductible health plans to set aside money to cover qualified medical expenses tax-free.
The expansion of HSAs could gain bipartisan support. A proposal to do just that, the Bipartisan HSA Improvement Act of 2023, was co-sponsored by Rep. Lloyd Smucker (R-PA) and now-retired Oregon Democratic Rep. Earl Blumenauer. The measure would have allowed money in flexible spending accounts and health reimbursement accounts to be rolled into health savings accounts. The bill also sought a rule preventing HSAs from being opened by those whose spouses have active flexible spending accounts.
Another proposed law, the HSA Modernization Act, would double the contribution limits for individuals and families to HSAs. The current limits for 2025 are $4,300 for individuals and $8,550 for families. One of the attractions of HSAs is that whatever money is not used carries over indefinitely, allowing younger, healthier adults to create a nest egg for healthcare expenses. People can also use HSAs to cover vision and dental expenses.
Short-term healthcare plans will likely return under the incoming Trump administration. President Joe Biden’s administration reduced such plans to a maximum of four months with no option to renew them. Biden has called the plans “junk insurance.”
These plans don’t fall under the Obamacare umbrella, as they do not provide comprehensive coverage and are not required to cover preexisting conditions. They are meant as a stopgap between group coverage policies, such as employer-provided plans or other longer-lasting health insurance policies. They are not intended for long-term primary coverage.
The Trump administration will likely revert to the 2018 rules, which allow the plans to last as long as three years. Critics of the Biden administration’s move, including the Cato Institute, Paragon Health Institute, and the National Association of Insurance and Financial Advisors, argue that limiting the terms for the short-term plans deprives people of more affordable coverage and could leave people with no health insurance at all.
Supporters of the Trump rules say the benefits of short-term plans are that people can purchase them whenever they want, as opposed to Obamacare plans with a specific enrollment period. They also offer significantly lower premiums than Obamacare premiums and more choices, such as opting out of prescription coverage, out-of-pocket maximum limits, and deductibles.
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Those changes could come early on, but they will face plenty of resistance from House and Senate Democrats, now both relegated to the minority at the same time for the first time since early 2019. Outside of Trump’s executive actions, Democrats will likely block any legislation in the Senate through the chamber’s filibuster rule, effectively requiring 60 votes in the 100-member chamber to pass legislation.
Trump does not want a Democratic majority in the House or Senate in his final two years in office. The likelihood of expansive healthcare legislation is minute. Tinkering with some aspects of Obamacare and the Inflation Reduction Act, a Biden administration domestic achievement, along with executive orders, will be the most politically expedient route to take for Trump and the Republican congressional majorities.