GOP Launches Rival Healthcare Plan As Obamacare Showdown Hits Senate Floor

Senate Republican leadership announced Tuesday that they will bring their own healthcare proposal to a floor vote, running in parallel with Democrats’ push for an extension of the enhanced Obamacare subsidies.

The Senate is scheduled to vote Thursday on a Democrat proposal for a three-year extension of the boosted subsidies, which Democrats secured as part of the deal that ended the record-breaking government shutdown. Following internal debate over several Republican healthcare proposals and whether to schedule a side-by-side vote, GOP senators have coalesced around a health savings account-based approach.

“It actually does make health insurance premiums more affordable,” Senate Majority Leader John Thune told reporters at a news conference Tuesday. “It delivers the benefit directly to the patient, not to the insurance company, and it does it in a way that actually saves money to the taxpayer. That is a win-win proposal.”

The Health Care Freedom for Patients Act— sponsored by Sens. Bill Cassidy, chair of the Senate Health, Education, Labor and Pensions (HELP) Committee, and Mike Crapo, chair of the Senate Finance Committee — is pitched as an “alternative to Democrats’ temporary COVID bonuses, which send billions of tax dollars to giant insurance companies without lowering insurance premiums.”

Under the plan, roughly $1,000 to $1,500 would be deposited into HSAs paired with bronze or catastrophic plans on the Affordable Care Act (ACA) exchanges.

The idea of redirecting federal subsidies from insurance companies directly to individuals has the backing of President Donald Trump, who has warned that extending the boosted Obamacare subsidies would hand insurers “another huge payday at the expense of the American people.”

Democrats, meanwhile, are pressing ahead with their three-year extension of the soon-to-expire subsidies, despite the near certainty that the measure lacks the 60 votes needed to pass.

The enhanced subsidies — enacted by Democrats in 2021 without GOP support — removed the upper-income cap and increased subsidy amounts, dropping premiums to zero for many enrollees. They are set to expire at the end of 2025.

A clean three-year extension with no eligibility changes would add $350 billion to the national debt over the next decade, the Committee for a Responsible Federal Budget estimates.

Republicans argue that Democrats’ plan, which goes even further than the one-year extension Democrats demanded during the shutdown, is primarily a political maneuver.

“I am absolutely open to a pathway forward, but what we’re seeing from Democrats is completely disingenuous,” Republican Sen. Katie Britt of Alabama told the Daily Caller News Foundation Tuesday. “They know that a flat three-year extension will not pass, so they’re intentionally putting something on the floor for politics, not for the people they serve.” (RELATED: Senate Conservatives Rip ‘Gateway Drug’ Earmarks In Government Funding Bills)

Concerns about fraud are also fueling GOP resistance to the extension of the enhanced Obamacare subsidies.

Research has shown that fraud is especially widespread among zero-premium plans, which critics say create opportunities for bad actors to enroll unsuspecting individuals without their knowledge. Moreover, the Government Accountability Office recently uncovered rampant fraud and systemic failures in the ACA marketplace, including fictitious identities, invalid Social Security numbers, and even deceased individuals being frequently approved for taxpayer-funded subsidies.

“This program desperately needs to be reformed, the Democrats have decided, ‘We’re not going to do anything to reform it,’ and so we’ll see where the votes are on Thursday,” Thune said

Republicans also point to rising costs, noting that Obamacare premiums have increased twice as fast as employer-based premiums — evidence, they say, that the program is not delivering on promises of affordability.

“Money should go directly to patients so they can make their own decisions, and that will drive down costs,” said Senate Majority Whip John Barrasso of Wyoming, adding that taxpayers should not be “held hostage in the straitjacket of the one-size-fits-all that is Obamacare.”

However, Senate Democratic leadership has already dismissed the GOP plan.

“Their phony proposal is dead on arrival,” said Senate Minority Leader Chuck Schumer. “Their bill is junk insurance; it’s been repudiated in the past. The American people will repudiate it once again.”

Democrat Sen. Richard Blumenthal of Connecticut said Tuesday that Republicans are “forcing a false choice on the American people.”

Even within the GOP, some are doubtful that the proposal has the votes to advance.

“In my opinion, trying to take the longer view — and also being as objective as I can — I think the only way that there will be a bill put together reforming the Obamacare exchanges is through the reconciliation bill,” Sen. John Kennedy of Louisiana told reporters shortly before the GOP announcement.

Although Republican leadership selected Cassidy’s proposal for a vote on Thursday, others — including Sens. Susan Collins of Maine and Bernie Moreno of Ohio — have introduced a two-year extension with income restrictions and minimum premium payments.

“I think we need to do everything we can to bring down the cost of premiums, so I’m happy to take a vote on any of these plans,” Sen. Josh Hawley of Missouri said Tuesday, adding he is inclined to vote yes on all of them. Hawley has also introduced a bill to allow taxpayers to deduct out-of-pocket medical expenses up to $25,000 per individual or dependent.

In the House, Speaker Mike Johnson said that Republicans will vote on a healthcare proposal by the end of December and continue working on healthcare legislation into early 2026, according to Punchbowl News.

Caden Olson contributed to this report.