House GOP Health Care Bill Proposes Subsidy Cuts, Association Plans, PBM Transparency

House Republicans are preparing to vote on their health care bill amid the impending expiration of enhanced Affordable Care Act (ACA) subsidies, which are unlikely to be extended as the Senate has no plans to act on health care proposals this week. The enhanced subsidies, enacted in 2021 under a COVID-19 relief package, have helped reduce premiums but are projected to lapse at the end of the year, potentially increasing premiums by 114% and expanding the uninsured population by approximately 2 million in 2026 according to the Congressional Budget Office (CBO). The Republican bill contains several measures reflecting longstanding GOP health care priorities, including the expansion of association health plans, which would allow small businesses and self-employed individuals to purchase group coverage across industries with potentially lower premiums but less comprehensive benefits than ACA plans. The bill would also reinstate federal funding for cost-sharing subsidies to help lower-income Obamacare enrollees with out-of-pocket costs; however, this measure may cause premiums to rise for moderate-income enrollees while reducing federal spending. This funding would exclude plans covering abortion services, an element unlikely to garner Democratic support. Additionally, the bill includes provisions requiring pharmacy benefit managers (PBMs) to increase transparency by disclosing pricing and rebate information to employers, although experts question the impact of this measure on drug costs. Lastly, the legislation seeks to solidify regulations allowing employers to provide tax-free health coverage funds to employees, which could have implications for premium dynamics in ACA markets by potentially shifting costs and risk. Given the lack of Senate action and bipartisan division, the continuation of enhanced subsidies remains uncertain, posing significant implications for the health insurance market, consumer premiums, and coverage access moving forward.