GOP moves to let Obamacare subsidies expire as Trump promises ‘money to the people’

Republican leaders on Capitol Hill are moving decisively away from extending key Obamacare tax credits that help more than 20 million Americans pay for health insurance — following direct cues from President Donald Trump while also stoking ire among many in the GOP who fear severe political repercussions.

In a Monday interview with POLITICO, Trump refused to endorse a continuation of the expiring subsidies, even as his administration faces mounting pressure to address rising costs for Americans. He instead laid out his own vision for health care: “I want to give the money to the people, not to the insurance companies.”

Senate Republicans now plan to offer a proposal for a vote Thursday that would let the subsidies expire and instead encourage the use of health savings accounts. That abrupt shift in strategy is in turn putting new pressure on House GOP leaders to come up with their own health plan, according to four people who attended a closed-door meeting with Speaker Mike Johnson and senior Republicans Tuesday afternoon.

Yet after months of pressure from competing factions, lawmakers inside the meeting didn’t reach a conclusion and Johnson is still trying to figure out what that plan should be. House GOP staff Tuesday were prepping a health care framework to give Republicans something to vote on next week before they leave Washington for the holidays — one that, for now, does not include an extension of the enhanced Obamacare subsidies.

For many Republicans facing tough reelection races and even some in deep-red areas with a high reliance on the tax credits, following Trump’s one-sentence policy prescription would harm Americans and make for political disaster as the Dec. 31 expiration of the tax credits looms.

“We can agree that the current construct is flawed, but that letting them expire is not acceptable,” Rep. Brian Fitzpatrick (R-Pa.) said in an interview Tuesday. “That doesn’t work.”

Fitzpatrick is pushing a competing proposal that would extend the tax credits for two years while imposing an income cap and other eligibility restrictions. Fitzpatrick’s bill also includes new HSA provisions and a bipartisan package aimed at lowering drug costs, but he said it was unrealistic for GOP leaders to completely replace the subsidy framework in a matter of weeks.

“They can just dig themselves into an ideological corner all day long — it’s not fixing the problem,” Fitzpatrick added. “We can’t live in this fantasy land.”

But Johnson appears determined to cobble together a health care framework that will not include even a short-term extension of the subsidies, which can cut premiums for many families by $1,000 a year or more. He blindsided members of his own leadership circle and senior Republicans who have been involved in health care policy work when he announced last week his intentions to unveil a GOP health plan early this week and hold a vote before year's end.

“What health care plan?” said one of the senior Republicans who has been involved in the talks and was granted anonymity to share a candid reaction to Johnson’s pledge.

Turning Johnson’s promise into legislation has been difficult. As of Tuesday evening, the House GOP framework centered on an expansion of health savings accounts and funding for cost-sharing reductions — a type of Obamacare subsidy meant to reduce out-of-pocket health costs, according to three people granted anonymity to describe the deliberations.

While the plan does not currently include a temporary subsidy extension, some senior House Republicans say it might still be on the table — including Rep. Lisa McClain of Michigan, the No. 4 GOP leader, who said she believed it was still an option as she left the health care meeting Tuesday.

It’s also still to be determined whether the plan will be offered up as a suite of individual bills or packaged together. But the goal is for GOP lawmakers to have “something” to vote on before the end of next week, according to one of the senior House Republicans involved in the talks — even if there is no time left for the Senate to pass it before the subsidies lapse.

GOP members will be briefed on the talks during their closed-door conference meeting Wednesday morning, according to three people granted anonymity to discuss internal planning. They will not be presented with a formal plan, they said.

The health care sprint also comes as Johnson faces down growing displeasure inside the GOP over his leadership style, where he has repeatedly sought to bulldoze internal dissent and march in lockstep with Trump. In this case, Johnson has so far sided with the bulk of his conference who want to see the Obamacare subsidies expire — even though some Trump aides have counseled that an extension would be politically prudent.

The White House was on the cusp of endorsing a two-year continuation of the subsidies just before Thanksgiving, but top Republicans on the Hill were not fully consulted first and moved to quash the idea — to the horror of many in the rank-and-file who favor an extension.

“I don’t think leadership understands just how upset people are,” said one House Republican who among several granted anonymity to speak frankly about internal conversations. “People are getting desperate.”

In fact, according to six other House GOP lawmakers and senior aides with direct knowledge, enough Republicans could sign a discharge petition that would sidestep Johnson and force a vote on extending the expiring subsidies. One of those House Republicans said they would be willing to support a discharge of Fitzpatrick’s legislation, which largely mirrors the White House trial balloon, or another bill from Rep. Jen Kiggans (R-Va.) and is waiting to see details of what Johnson proposes as an alternative.

“We shall see,” the lawmaker said.

Some in the GOP who support an extension have floated a short-term patch until Jan. 30 in order to buy some more time to come up with a deal. Many Republicans in the White House and on Capitol Hill believe that once the tax credits expire, there could be a chance to work out a wider health care deal next month that could tackle issues such as HSAs and drug prices.

While that argument has its merits on paper, people involved in the talks say a short-term punt wouldn’t make much sense for people trying to buy health insurance for the entire year and could create major logistical hassles.

One of the many problems is the White House itself isn’t providing any clear guidance amid all the internal divisions. The Trump administration itself has been and still is deeply divided about allowing the Obamacare tax credits to lapse, according to two administration officials and three senior House Republicans involved in the conversations.

“It depends on who you ask,” said a senior House Republican about the White House’s views on health care.

One White House official said Tuesday that “policy teams are looking at a lot of different avenues” and that “three weeks is actually a lot of time for a lot of stuff to come together.” However, both the House and Senate are set to adjourn for the holidays at the end of next week.

The Senate plan now set for a vote Thursday, from Sens. Bill Cassidy of Louisiana and Mike Crapo of Idaho, quickly won support inside the GOP this week amid fears that the party would look hapless if they did not put up an alternative to Democrats’ plan to extend the subsidies for three years.

But there are still plenty of lawmakers who are anxious about voting to upend the health care system with the deadline looming and no signals from the White House on what Trump would accept.

"There's just not enough time to do a comprehensive bill," one House Republican said, adding that the expiring subsidies will be “a problem for everyone” in the GOP.

Jordain Carney, Cheyenne Haslett and Mia McCarthy contributed to this report.