Senate Proposal Targets ACA Premiums and Subsidies with Patient-Centered Reforms

Senate Finance Committee Chair Mike Crapo and Senate HELP Committee Chair Bill Cassidy have proposed the Health Care Freedom for Patients Act of 2025, aiming to reform key aspects of the Affordable Care Act (ACA) without increasing federal spending or deficits. The legislation seeks to appropriate cost-sharing reduction (CSR) payments, which would reduce premiums by approximately 11% and lower federal subsidy costs, addressing the current silver-loading premium distortion that increases costs for consumers and the government. The bill would also expand access to ACA catastrophic plans by removing age and hardship exemption restrictions, enhancing consumer choice and market competition. Additionally, it introduces health savings account (HSA) contributions for enrollees with bronze or catastrophic plans and incomes below 700% of the federal poverty level, promoting consumer-directed healthcare spending and increasing price sensitivity. Significantly, the proposal opposes extending COVID-era subsidy increases set to expire in 2025, citing concerns that these boosts have led to fully subsidized plans contributing to fraud, phantom enrollments, and weakened market cost discipline. The legislation suggests maintaining current subsidy levels, which already cover over 80% of premiums for average enrollees, to prevent further inefficiencies. An identified gap in the bill is the lack of a minimum monthly premium payment requirement, which experts consider essential for reducing fraudulent enrollments by ensuring beneficiaries have a financial stake in their coverage. Advocates suggest a nominal $25 monthly payment mandate to reinforce accountability. The broader critique of Obamacare highlights issues like high premiums and deductibles coupled with narrow provider networks, overly generous subsidies disincentivizing employer coverage offers, and rising federal deficits with substantial spending on ineligible or non-utilizing enrollees. The Crapo-Cassidy proposal aims to alleviate these problems by redirecting subsidies toward patients rather than insurers and fostering more affordable, consumer-friendly plans. Further recommended reforms include expanding association health plans, restoring flexibilities for short-term limited-duration insurance, and enhancing individual coverage health reimbursement arrangements (ICHRAs). Collectively, these measures intend to increase affordability, reduce fraud and improper payments, and empower Americans with more choices in coverage and care providers.