His approach would create Trump Freedom Accounts for states that choose to get a waiver.
Sen. Rick Scott (R-Fla.) has issued his alternative to enhanced Obamacare subsidies.
His “More Affordable Care Act,” released Thursday, enables Obamacare customers to use a “Trump Health Freedom Account” that resembles a health savings account.
Scott said in a statement that his bill addresses President Donald Trump’s call for the enhanced subsidies Democrats created four years ago to be converted into a direct payment to consumers. It also comes as Republicans are looking for an alternative to extending the expiring subsidies, a key demand from Democrats.
“My new bill makes simple fixes to Obamacare that will make a world of difference to American families by making Americans the consumer, not the government, while giving them options and transparency,” he said in a statement.
The legislation would let the enhanced subsidies expire as scheduled at the end of the year and allow states to apply for a waiver so consumers could gain access to the “freedom accounts,” which would include all the funding a consumer would be eligible to get from the original Affordable Care Act subsidies, which will remain in states that do not have a waiver.
The freedom accounts would also include all funding for any cost-sharing reductions, which are given to low-income ACA customers to pay down out-of-pocket costs like copays or deductibles. A little more than half of ACA enrollees, or about 12.5 million people as of early 2025, receive the reductions.
Unlike a health savings account, the freedom accounts could be tapped to pay insurance premiums.
However, the account cannot be used to pay premiums for any health plan that covers abortion or gender transition procedures, according to the bill text.
Scott’s approach is different than Louisiana GOP Sen. Bill Cassidy’s. Cassidy has proposed converting the enhanced subsidies into funding for a health savings account. An HSA can be used to pay for deductibles and copays but it cannot be used for premiums.
Under Cassidy’s plan, which has not been released as a bill yet, the remaining base premium tax credit created under the original 2010 ACA would remain and the HSA would only be funded by the amount of the enhanced subsidy, which Democrats created in 2021 legislation.
Cassidy said the health savings accounts would be available to consumers on high-deductible bronze plans. Those in platinum, gold and silver plans with lower deductibles would not receive any help.
Senate Democrats are cool to Cassidy’s proposal, saying there isn’t enough time to implement it as open enrollment for 2026 plans started several weeks ago. They say the best thing to do is extend the subsidies before they expire, a move Republicans have opposed.
Scott’s proposal differs from Cassidy’s in another way: it would let insurers sell plans across state lines. Scott said in a release that this ensures Americans can purchase the care that best meets their needs.
Currently, insurers can sell ACA plans across state lines, but only if that plan meets the same requirements as the other state.
Each Obamacare plan must cover certain health benefits, but states can add to those requirements. Scott’s proposal, if signed into law, would enable an insurer in a state with lax requirements to sell to customers in a state with a stricter regulatory scheme.
Democrats have opposed prior attempts from conservatives to allow the sale of insurance across state lines, worrying that it could undermine states’ own regulations.