After pledging no negotiations, Republicans make an Obamacare proposal.
Hey, Guess What. Republicans Negotiate!
The Wall Street Journal reports Republicans Pitch Alternative to ACA Extension to End Government Shutdown
Senate Republicans have made what amounts to a counteroffer in a bid to end the government shutdown, proposing that some healthcare funding be provided directly to households rather than be used to pay for a one-year extension of enhanced Affordable Care Act subsidies.
The leading GOP proposal involves sending federal money into flexible-spending accounts instead of to insurance companies. The money could be used to cover deductibles and other out-of-pocket costs, which Republicans see as a way to give consumers more choice and control healthcare inflation.
“Let’s just move beyond our trench line, and let’s actually think creatively,” said Senate Health, Education, Labor and Pensions Chairman Bill Cassidy (R., La.), the proponent of the leading idea, on the Senate floor Saturday. “And can we give just a little bit to find something which actually benefits the patient but may also get us out of this situation?”
Republicans had previously said there would be no negotiations until Democrats ended their blockade, but the new healthcare pitch—despite many questions about how it would work and when it could be rolled out—showed the GOP could be flexible on that stance.
Senate Majority Leader John Thune (R., S.D.) has kept the Senate in session all weekend, as lawmakers see growing urgency to end the shutdown, amid growing airport snarls and delays in food aid being distributed to millions of Americans.
Senate Minority Leader Chuck Schumer (D., N.Y.) rolled out the idea for a one-year extension of enhanced ACA subsidies on Friday as the price of Democratic votes to fund the government. But the idea was promptly rejected by Republicans, who said it showed Democrats were desperate. Democrats had previously proposed a permanent extension of the enhanced ACA credit, which was first introduced during the Covid-19 pandemic.
Still, the overture looked to point to actual negotiations, and by late Friday Cassidy was pitching his idea on the floor—and drawing engagement from Democrats like Sen. Maria Cantwell (D., Wash.), who took to the floor to ask about his idea.
“I think you are trying to figure out something that would get people the same amount of money to make them whole over the next year or two; is that correct?” she asked. Cassidy said “That is correct.”
President Trump then followed with a social-media message Saturday morning. “We must stop taxpayer money from going to insurance companies and instead give it directly to Americans in HSA-style accounts and let them buy the healthcare they want,” he said on Truth Social.
That was viewed within the Senate as an endorsement of the sort of approach being pursued by Cassidy. Sen. Rick Scott (R., Fla.) said in a separate post, “Totally agree,” and added: “I’m writing the bill right now.”
“Republicans are now talking about how they want to go after big insurance companies,” said Sen. Ron Wyden (D., Ore.), the top Democrat on the Senate Finance Committee. “If they’re serious, I’m all in.” He said that he and Cassidy had been talking—but he also said that the idea couldn’t be implemented right away.
Sen. Cynthia Lummis (R., Wyo.) said that the president’s remarks show that Trump is backing the idea from Cassidy as well as Sen. Roger Marshall (R., Kan.), another physician who is involved in it. She said that the ideas amounted to the GOP response to the Democratic demand for a one-year ACA extension.
“This has real legs,” Lummis said. “It’s not a tennis court where only one player is on the court. I think two tennis players are on the court here, and I think it’s some of the Republican healthcare experts like Bill Cassidy and Roger Marshall, and some of theirs. So I think the ball is going to start getting hit back and forth now.”
Hoot of the Day
Countless times I was told Republicans would not cave and would not negotiate.
Well, guess who was right.
Majority Leader Thune said on Friday that Democrats were desperate. I suggested Republicans were desperate. Who was right?
What Will This Cost?
I got a tremendous amount of pushback when I said Republicans should jump on the Democrat’s one-year extension plan.
The cost of the extension program would have been a mere $35 billion. That’s the absolute best that Republicans could ever hope to come away from any deal with Democrats.
Now what? Now Republicans are proposing direct cash to consumers.
Q: Since Republicans now own the free money idea, how the hell will they ever turn it off?
A: They won’t.
The cost will be $350 billion over 10 years (if not more by the time we are done with this). Taking the Democrat’s offer would have cost a mere $35 billion.
And that would have been a genuine, first in history, one-time temporary proposal.
Democrats Offer a One-Year Obamacare Extension Deal. Should Republicans Accept?
Let’s take another look at my November 7 post Democrats Offer a One-Year Obamacare Extension Deal. Should Republicans Accept?
Decision Irony
“At some point, they’ve got to make a decision about whether or not they want to keep this going or they want to end it,” Thune said of Democrats.
Schumer’s offer reverses the setup.
How I see it: “At some point, Republicans have to make a decision about whether or not they want to hold out for 100 marbles or accept 98.”
Republicans would be crazy not to accept this offer. It’s just one year. And they can block further extensions easily.
Observation on Temporary
By definition, a one-year extension is for only one-year. Mercy me, we may have the first temporary extension of anything by Congress in history.
That’s what Republicans should latch on to. Seldom do you get a deal with Democrats that costs so little.
And it ends the blame game that Republicans were losing.
Throw Temporary Out the Window
Republicans managed to snatch defeat out of the jaws of victory. Republicans had the ball on the opposing 1-yard line and punted.
This agreement, whatever the heck it is, will be renewed over and over because Republicans now own it.
Fundamentally, I would rather have people decide how to spend money than government spend it for them.
However, the cost of the program just soared, as I predicted all along. Kiss the chance for temporary anything goodbye.
This was too easy to see.
MishTalk.com is now #7 among the 30 listed best macroeconomic blogs. Mish, your relevant content deserves, in my opinion, yet a higher rating. You are followed by a great group of representative bipartisan (and partisan) positions and their telling commentaries. I am amazed with your prolific observations and commentary of political and macro news-worthy events. Keep at it and Bravo.
Thanks TEF – Very much appreciated.
he was #4.
Sorry, Michael, show your work. Here is what TEF was correctly referring to. But that was a nice try by you.
https://bloggers.feedspot.com/macro_economics_blogs/
“Republicans see as a way to give consumers more choice and control healthcare inflation.”
What choice do consumers have from the private sector?
Each state varies but the average is three per state so there is no choice unless one thinks a market of three suppliers to approximately 23M consumers is a competitive supply side.
The ACA list as it structured in 2025 is an oligopoly of service providers , hence no competition.
Has any Republican reviewed the fictitious understated healthcare inflation per the CPI?
Healthcare requires rationing either through pricing median working class employees with no employer coverage to limited and expensive coverage that a household is one debilitating disease away from bankruptcy, possibly homelessness.
The other alternative is rationing similar to France, Canada, Germany, Switzerland, the Nordic countries, Japan, Israel, etc. In short universal care but elective procedures are scheduled and delivered but not as expeditiously as in the US for those that have Medicare, very generous employer funded or Cadillac type coverage.
How much should the taxpayers pay to keep an 85-year-old person alive for an extra year?
a) nothing; they’ve already lived beyond the average lifespan
b) whatever it takes.
c) $75,000 per year
d) $7,500 per year
e) Is the person of significant value to society?
f) How much have we already paid for the person’s health care?
Obama care is full coverage republicans want to shape it where its free market. money will goto crappy half coverage policies or food etc. . . I would think the gov representing that many policies would hold prices down thus pulling prices across the board. . Prob why they dont like it.
Follow the contribution money. Know whos pulling the strings.
Before the ACA there was Romneycare and before that was Nixon’s healthcare proposal which in hindsight Senator Kennedy said that he and the Democrats should’ve accepted.
Nixon’s was a combo of private and public insurance for all Americans.
Repubs will cave, they are getting the blame for the crashing economy.
1100 flights canceled today. Unpaid soldiers and unfed soldier’s families won’t bode well for the Trump admin.
Are you reading the news out of DC today? Not the old WSJ article referred to here but the actual on the ground happenings?
Until a vote actually happens and the government is open, it’s all grandstanding.
Make that 2000 flights cancelled and it’s going to get worse. 7000 flights delayed. The economic damage is palatable.
Well, of course. Who else would you blame?
I always blame the party in power.
How does giving health care $ to individuals address the issue that the market premium for seriously sick people can be extremely expensive?
You have to cap lifetime claims on healthcare, or reduce healthcare for all those who can’t afford premiums.
Mish, I am based in DC I am reading today’s activities totally opposite of you.
Same ole sh-t. Prob not a major factor, but Tune has a lot of hidden baggage.
Elon Musk has made a video giving his assessment of the republican counter proposal. It is worth watching; I found it encouraging. I liked how he linked the thought of making payments directly to individuals gave those individuals power and influence over how the money is spent rather than a dictating corporation leaving the individual to hope for the best and being guaranteed a huge amount will be siphoned away from its intended purpose. He also points out how the counter proposal puts democrats in a position of defending big business while Republicans can claim to be for the working person.
https://www.youtube.com/watch?v=59UFs7v3qnU
This is what it boils down to.
Redistribution of money. Collect taxes and pass out more of it back than collected.
Spot on. One could make that statement about the federal government as a whole to the tune of $38 trillion in excess.
The annual deficit spending (aka fiscal “stimulus”) is way more destructive than that $38 trillion national debt.
If Elon likes it, it’s a horrible idea.
Medi-fraud will take off like a MUsk rocket.
French lawmakers vote to tax American retirees who freely benefit from social security Members of the Assemblée Nationale backed an amendment to the social security that would create a ‘minimum contribution’ on foreign retirees who receive free healthcare.
https://www.lemonde.fr/en/politics/article/2025/11/08/french-lawmakers-vote-to-tax-american-retirees-who-freely-benefit-from-social-security_6747260_5.html
In australia peoples who have a disability don t get a permanent Visa.
Doug78 is in deep trouble now!
Pin TEF stamp of approval !
OK – I will
The federal government budgeted $138 billion for the 24 million people enrolled in the ACA for 2025. That is $5750 per recipient. This with higher amounts for the poor and less for higher income folks.
I’m not sure what value sending checks directly to people will have. What difference does it make if I pay the insurance company directly versus the government paying some portion? What efficiencies does the average person bring to the equation?
Imagine your average Joe finding out how much they give insurance companies versus how little they actually get back. What would be the political implications of that? Would people start demanding a lower cost public option? Federal pricing controls? GOP Senators need to think of the long-term implications before making changes.
… what value sending checks directly to people will have….
New model iPhones, cars, drugs, cruises… Then, when they are sick, they’ll go to the ER for freebies
The solution? You don’t send checks/cash. Instead, you get ‘credits,’ redeemable only at authorized providers. If providers cheat, the penalty is prison.
Isn’t that really just what the ACA is? Credits provided by FedGov? Without the cheating penalty of course, because of Citizens United.
During covid Trump administration sent checks directly to the poor and the middle class, avoiding the banks. In May 2020 US currency in circulation was: $1.9T, up $100B since Feb 2020, but US debt jumped $3.5T at the same period. Guess what: if the mag 7 selling cont and Obamacare holders will get cash ==> the rich and the poor will have fun.
Perhaps this is the alternative Republicans will offer instead of Obamacare. Depending on your income, you may be given some level of financial support that you could use to purchase a health plan in the open market. It’s a simpler and better idea than Obamacare. Perhaps this idea is the trojan horse that eventually gets rid of Obamacare, and even Medicare (another inefficient government program).
What you describe is exactly what we already had, subsidies. That’s what the Democrats are asking for already.
What the Republicans are proposing can’t be spent on health insurance. It’s supposed to be direct spending for healthcare services.
Republicans are counting on you to not be able to understand what’s happening. Don’t let them trick you.
Cassidy’s idea is horrible. It’s stupid.
Explain why!!!!!
The people need health insurance, which, tragically, because of the morons who love these BS gimmicks, requires health insurance companies. This is a gimmick. There is no evidence health spending accounts do anything other than reduce revenue to the Social Security Department and balloon the deficit.
I understand….. you don’t get it. OK.
This gets the two sides to start “talking “ Which they haven’t done in 10 years.
Let us see what happens in the next 3 or 4 days.
Progress????? Or failure?
Related to my last post
“We see President Trump as our second God,” said Bamshak Daniel, a Christian community leader in the small town of Mangu in central Nigeria’s Plateau state
Does Nigeria have any oil, per chance?
You can bet it will be a “blood sucking” offer. Taco wants to cut out food stamps, but will probably suggest more tax cuts for his billionaire buddies and pardoned criminals.
Only a person without health insurance (like Trump) would think giving money to people directly instead of through insurance companies is a good idea.
The way the health industry racket is set up, you have to have health insurance to even get care. Try to make an appointment and the first question they’ll ask is “what kind of insurance do you have?”
If you have to pay cash, then you are offered retail prices on everything which are much higher than what insurance companies pay.
Americans have no idea how to negotiate prices because everyone expects to pay the sticker price. Even if you do manage to negotiate a lower price, it probably won’t beat what the insurance price is.
The whole idea is a non-starter and no surprise coming from someone out of touch who doesn’t have to worry about paying for health care.
I can’t believe that many commenters here don’t remember the bad old days when medical bankruptcies were a national crisis. As recently as 2009 the % of Americans who had no health insurance was TWICE what it is recently. Republicans seem hellbound on bringing those days back.
Giving money for health insurance directly to the people is the worst of the worst – the insurance coverage will stay very low and the inflation will go through the roof because people will spend the money on all kinds of junk.
Have you ever tried paying retail prices? You have no idea what you are talking about.
If you can provide evidence that a “retail” price for medical or dental care is the same or lower than the prices insurance companies negotiate, I’d like to hear it.
I wouldn’t bother getting dental insurance if dentists charged me the same amount whether or not I have insurance.
As a matter of fact, lots of dentists are no longer accepting insurance because the reimbursement rates are too low.
that has been the case in NY for many years. I had a dentist 21 years ago that took no insurance and gave you his upfront price, which was reasonable
His take, its not worth it to me to pay someone 50,000 a yr(probably close to 100k now and fight with insurance companies.
His words, not mine.
I, for one, welcome a redirection of funds into healthcare savings accounts.
One might askfor an even simpler policy: for the gov to stop collecting taxes and let people decide whether to save for healthcare or direct that money elsewhere. But when people don’t save for it and they desperately need help, we end up paying for it anyway. … That’d be even more contentious though.
So far, that’s potentially 2 things I like from the R’s this year: end the mandate and then this.
Doesn’t make up for much. But better than nuttin.
How can you think it’s a good idea…If you came down with something serious, do you think a lump sum in an HSA would even cover the diagnostic stuff like tests and scans? How much would the government have to put into HSAs for people to make up for lack of insurance? Do you understand why an HSA and insurance are completely different things? Have you thought it through, like, at all?
Tests cost WAY less than you think. My family has been on an HSA for years and never had any problems.
There’s a reason the rest of the world pays way less for health care than the US does. It’s because they can see the costs and shop around. Everything in the US is hidden and as a result it’s more expensive by far.
I don’t think Canadians or Brits “shop around”. Their bills are paid by the government. Also, the median IQ in the US is ~ 98. That means 1/2 the population is lower than 98. And many people with higher IQ’s have depression or serious mental illness that leaves them effectively incapable of shopping around, not to mention following up on complex coded bills. Acting as your own insurance company is beyond the ability of most people.
Yes ….similar to the retirement conundrum.
You aren’t acting as an insurance company. You are acting as a consumer and shopping the best deals.
Despite half the population having an IQ under 98, they still seem to all know how to go on to Amazon and buy items at the lowest price or shop at Walmart etc. Even my 2 cats know when one is getting more treats than the other (short changed). It’s hard wired into us.
Exactly.
Competition and budgetary discipline drives down prices. Without decentralizing selling and buying decisions, there is no competition. And the corporations work with the government to raise payouts to them.
Are you “Ad Hominem”?
Thats true TT65 but Phil is not wrong. Even with the hidden veil off, at least in the short term an HSA is not going to cut it.
The think tanks launder positions through the politicians.
They’ve all been “negotiating”. Now they’re publicizing it.
I wonder how much of the eventual “outcome” was decided prior to the shutdown.
It’s all in the dollars
How far does $500 or $1000 go in the medical bill world?
Or even in the health insurance market?
> How far does $500 or $1000 go in the medical bill world?
Gets you past reception.
A lot farther than you think.
I pay cash for all my families health care though flexible spending accounts (HSA in my case). When you are responsible for your own money it’s amazing how well you check prices (I always shop around for things like MRIs and other medical care) and shocking how little many things cost that on insurance bills show thousands that in reality cost a hundred or two.
Americans have LONG needed medical prices out in the open so they can shop prices (American consumer is very good it). When it was all hidden behind insurance no one had any idea what anything cost.
Fake bills and disparate billing are arguably already illegal under the Robinson-Patman ACT, but there’s no prosecution.
Denninger post today.
Wait a minute. Are you saying you go without any health insurance and pay for everything with cash?
OR you have health insurance through an employer and “shop around” for how you spend your limited HSA money on the deductibles.
Because those two situations are a world of difference apart.
Which is part of the reason this ‘new’ Trump/Republican plan has not worked/been voted on in the past. Giving some HSA cash to extremely sick (or likely to eventually be sick) or poor individuals who then have to shop around for their own health insurance policies will not work.
For the majority of people, if you don’t have an affordable or employer-provided insurance plan (but only have a little HSA cash), you are one broken arm (much less heart attack) away from severe monetary stress
In my case I have a basic plan through my employer but it’s essentially meaningless because the yearly deductible is something like 3500 per person / 5000 family. Short of a true medical emergency, 100% of my yearly family medical costs comes from my HSA account and the insurance plays 0.
My neighbor is a lawyer with his own practice (family law). Since he has like 3 total employees they have no medical coverage at all so he pays cash for everything (he totally negotiated his fees after a motorcycle accident that required him being in a cast for broken leg. His final cost was <1000 dollars for the ambulance ride, scans, cast and follow up visits). He’s the one that clued me in a few years ago to dropping from a PPO (or whatever its called) to an HSA plan because it would cost me less money and I’d get to keep everything I didn’t spend each year.
Sorry, Tim, but you don’t seem to understand very well how the insurance market works.
Your basic plan is “essentially meaningless”? If you get cancer or a heart attack or a brain tumor, you’ll only pay $3500 in deductibles to be cured. Whoa, what a deal! If you don’t understand how others don’t have this super valuable backstop or opportunity exhibits why you don’t understand why the ACA subsidies are being debated.
People all over the US have HSA health insurance policies like yourself, including me. My individual/family deductibles are nearly identical to yours. And my employer pays out $22,000 a year for me to get the coverage which goes with that HSA account.
A Republican plan to give a few thousand $ to lots of people will give them a few tests and doctor visits each year but it won’t come close to getting them health insurance against something bankrupting, even if they shop around
HSAs are not insurance.
They’re basically a savings account, to use towards future medical expenses.
– Senate Republicans are proposing that some healthcare funding be provided directly to households rather than be used to pay for a one-year extension of enhanced Affordable Care Act subsidies.
> Love the idea! Nobody can skim off the Top, Must have very strict guidelines for the Funding, to avoid scams.
– The GOP proposal involves sending federal money into flexible-spending accounts instead of direct to insurance companies.Republicans see this as a way to give consumers more choice and more control over healthcare inflation.
> I agree! These plans are very well run. They have tight control of items and monitor the spending accounts closely.
– “Let’s just move beyond our trench line, and let’s actually think creatively,” said Senate Health, Education, Labor and Pensions Chairman Bill Cassidy (R., La.), the proponent of the leading idea, on the Senate floor Saturday. “And can we give just a little bit to find something which actually benefits the patient but may also get us out of this situation?”
> Excellent!
People in the sports betting business world love it.
It’s all blindingly stupid. They’ve had decades to see this problem coming and done nothing but impede every effort. And now they want to offer some kind of crazy direct cash deal, as part of government shutdown negotiations? It’s all just so stupid and incompetent!
Republicans didn’t cave. They implicitly got a stronger control mechanism to prevent funds from going to illegal aliens. So the next three years will be reducing individual Obamacare fraud. That’s where some savings can be had.
!!!!! Thank you !!!!!