Shambola: Health savings accounts are no substitute for Obamacare

 GOP has long supported health savings plans as an alternative to the ACA.  This is shambolic, at best, They claim this would give consumers more choice and control, and shortcut the middle man.  Consumers are not pining for more choice; they are wanting a plan that is indeed insurance they can afford. ,It they fail to extend the ACA subsidies, it will  be ripe fodder for Democrats to win in November 2026 after consumers get the actual sticker shock.  The final vote in Congress will take place December 17.  Voters will not be fooled when they get their bills for 2026 Obamacare....and many will still be forced to go without insurance because of the premium unaffordability.  

The ACA was inspired mostly by a Republican governor, Mitt Gov. Romney of Massachusetts, as an alternative to Medicare to All, popular among some on the left. While it did not help rein in the insurers, it provided a way for the self-employed and those who did not get insurance from an employer to get affordable access to preventive care, coverage of those with pre-existing conditions, and catastrophic illness to receive the care they needed. Subsidies and premiums in the ACA are geared to consumer's income...the lower the income, the more the subsidy, the cheaper the premium. Nothing proposed by health care saving plans comes close to providing the same advantage nor does it do anything to rein in the insurance industry's greed. Health savings plans only give consumers the ability to buy cheap, partial coverage insurance, either catastrophic or inadequate, high-deductible coverage, but not both, at retail, fine-print policies. This assumes consumers can find any insurance on the open market that also cover their pre-existing conditions. That is only music to the insurance companies' ears as they can scrap coverage of those who are sick in favor of those who are already healthy.

 In the guise of lowering premium costs, one provision being discussed recently  by advocates off replacing the ACA with health savings accounts deceptive and irrelevant. .Instead, this sham GOP bill  favors business who can lower costs of covering insurance to their employees by forming cross state alliances.Irony: Obmacare  purpose was and isto provide affordable insurance for those who do not get employer's insurance....so this is meaningless and useless to those depending on Obamacare; it's just a plum for business and there is no guarantee business will lower its premiums for employees, either..

  Voters will not be fooled when they get their bills for 2026 Obamacare....and many will still be forced to go without insurance because of the premium unaffordability.  

Health savings account instead of Obamacare? A trojan horse

Update: 12/6/2025  So once again...health savings accounts to replace Obamacare? What if a catastrophic disease like cancer happens and the savings account is depleted? Like Obamacare, this does nothing to control the greed of insurers...it just pays for their increasing greed. GOP plan scales back Obamacare, creates Trump Health Freedom Accounts | Fox News    Trump and the GOP are trying to offer consumers the gift of more choice.  That is NOT  what consumers are seeking. They want to afford insurance, of course, but not insurance that would run out in the midst of the onslaught of a catastrophic illness or pre-existing conditions that require huge monthly outlays.  They want coverage that works, not a half-baked substitute that does not.  Health Savings Accounts, Backed by GOP, Cover Fancy Saunas but Not Insurance Premiums - KFF Health News     Another approach would be to fund only catastrophic insurance through the bronze plan, meaning consumers would have to be res;onsible for extremely high deductbles and pay a lot of money out of pocket for things like routine doctors visits and cancer screenings for breast, colon, and prostate prevention.  Imagine how many bankruptcies would be caused by unaffordable deductibles and co-pays, not to mention deaths caused by a lack of preventative care.  Obamacare (ACA) found a way to do both: cover preventative care and early detection plus cover catastrophic health crises. 

Update: 11/24/2025; An interesting about-face? Originally, Trump floated the idea of just giving money to those who need health insurance, and others proposed putting that into already existing health savings accounts. He made a big deal of going around the "middlemen, the insurers, and putting the money in the hands of consumers. That proposal got pushback: The problem: What happens when someone gets a catastrophic health problem and uses up the paltry amount in their account? Go bankrupt or sell their homes? Someone got to Trump: the insurance lobby? Now he favors extending Obamacare with some restrictions that will also limit who can qualify for the subsidized insurance offerings.

Continuing with the original post 

It looks like the GOP is going to try to substitute Obamacare with a health savings account...a long-time conservative proposal. The problem is that if you have a catastrophic illness like cancer, plan on going bankrupt or selling your home to pay the bills. What might happen is that those with means will buy catastrophic insurance out of their own pockets, and everyone else will just be taking a risk that they do not get seriously ill. If you have a pre-existing condition, good luck in finding catastrophic insurance you can afford. This is is gift horse that is a Trojan horse. The gift horse, say conservative think tanks and Trump, gives consumers more choice and cuts out the middleman, but what consumers want more than choice is efficient, affordable, and adequate coverage. By itself, health savings accounts are not adequate, and insurance middlemen still play a role.. They have to be combined with other insurance to be adequate.

FYI: Obamacare, so much hated by the GOP and now so popular with public opinion, is actually based on the plan instigated by a Republican governor. The 2006 Massachusetts healthcare law, commonly known as Romneycare  share several key features and architects with Obamacare.  "The insurance company lobby is a powerful one and whatever Trump says about the middlemen and insurers, guaranteed: the GOP Congress will not cross insurance companies...nor will Trump.

The only plan for consumers that gets rid of the middleman, gives consumers choice, is efficient, affordable, and adequate, would be Medicare for All..

So what about the interim when this all-new approach has to be established by law? Trump proposes a $2k gift to everyone. A person I know with treatment for a pre-existing condition said it would cover one month of his medical expenses.

From the Washington Post article: https://www.msn.com/.../gop-plans-to-replace.../ar-AA1QwZqC

"But FSA money generally can’t be used to pay premiums — meaning that patients would be on their own when it came to paying the regular monthly costs to stay insured.

FSAs are “great for buying eyeglasses and going to the dentist, but if you have a catastrophic health event, they’re not going to help,” said Thomas Buchmueller, a University of Michigan economist who served in the Biden administration. "

Health savings accounts have existed since 2004 and are used in combination with other insurance plans, such as employer-provided insurance and catastrophic insurance. As a stand-alone substitute for Obamacare/ACA, it is not, and if combined with Obamacare and subsidized by the federal government, there are serious repercussions to consumers. Health savings accounts were discussed during the debate on the establishment of Obamacare and rejected. Obamacare could collapse under Trump’s new plan, policy experts say - POLITICO

Even in existence, the health savings accounts have had problems: (per my Google AI search)

• Eligibility Restrictions: To be eligible for an HSA, an individual must be enrolled in an HDHP, which can expose them to high out-of-pocket costs before the deductible is met. (My observation: it has only been approved when combined with another insurance plan...so insurers still get their cut and the middle man is still involved) 
• Cybersecurity Threats: The growing value of HSAs has made them a prime target for cybercriminals and fraud, leading to security incidents and the need for robust account protection measures.
• Underutilization of Investment Potential: While funds can be invested, research indicates that only a small percentage of HSA owners invest their balances. 

GOP plans to replace Obamacare have failed. Here’s what lawmakers propose now.

Trump's new concept for health care insurance. Pay retail and get less for your money..

Update 11/17/2025 Trump says he’s talking to Democrats about direct health care payment plan   "The insurance company lobby is a powerful one and whatever Trump says about the middlemen and insurers, guaranteed: the GOP Congress will not cross insurance companies...nor will Trump.

Continuing with original post:

Trump has a concept for health care: send consumers a couple of thousand dollars toward their health care costs. Nutty and stupid. "This is, unsurprisingly, nonsensical," Sen. Chris Murphy (D-Conn.) posted on X. "Is he suggesting eliminating health insurance and giving people a few thousand dollars instead? And then when they get a cancer diagnosis, they just go bankrupt?" Trump says cut out the middleman (meaning ACA), and take federal money, and find your own, and then, red flag warning. pay full retail price and any shortfall? To whom? Of course, the insurers.

The insurers would really like this one. These insurance companies could now charge as high retail rates as they can get away with for individual purchasers and screw those with pre-existing conditions, or refuse to insure anyone with pre-existing conditions, and then offer less preventative care for more bucks. That's just like it was before Obamacare, only now you would have some money from the feds to buy your own. Insurance companies could now make off like bandits with nothing to stop them from gouging their customers with less coverage for more money. and the insurance companies will be thanking Trump on the way to the bank..They have found a way around anti-price-fixing laws by using third party hubs, so any open-market competition would not drive down prices. This is Trump's deal that takes the place of group rates with large pools to spread around risk like Obamacare offered, and without insurers having to bid against competitors, meet the required preventative care coverage, to be offered in the state marketplace.

The ACA was designed to do the major things: cover the affordability gap for those who did not get insurance from employers, Medicare, Medicaid, but the cost of private insurance was too high for their income level (subsidies are based on income level; a kind of means test), to spread risk around (the pool) so those with pre existing conditions could get insurance they could afford; and provide affordable access to preventative care and early diagnosis. There are far more efficient and cost-effective plans like Medicare for All out there, but this is what we have now...and the GOP has never come up with anything for a decade. High-risk pools have failed where they were tried, like Colorado did once. Health savings plans have been around for years, but have never worked out. These alternatives failed so badly that they led to Obamacare/ACA, which is less than perfect but at least addresses subsidies based on need and covers pre-existing conditions and preventive care.

Such a benign wannabe despot, Donald Trump, is: zap.$2k to pay oops on tariffs to all but the rich, and a couple of thousand so you can pay more for worse health insurance. Budget hawks in his party must be getting ulcers.. So you think a couple of thousand dollars, a one-time gift from the US Treasury, like Trump proposes, will make a difference?

That "oops, we screwed up so here's some bucks", worked during COVID as a political plus, but this Trump concept is different. It is a political trick to get the GOP through the 2026 midterms that does not do anything to fix the long-term damage to health care affordability. This "such a deal" is no more than a band-aid without adhesive, and half covering a wound. COVID would end; your needs for affordable health insurance will not. I predict this Trump concept will have an early death.

Some thoughts on Medicare for All replacing the ACA or the entire health care insurance system.Trump's proposal to give people 2K in compensation for making the ACA unaffordable recognized one fact. The insurance companies, the middleman, are the problem. In doing so, he opens the door to what insurance companies fear the most: Medicare for All or something comparable. The advantage of the Medicare for All approach is that the mechanism already exists, but would have to be scaled up. The wheel need not be reinvented.  The other advantage is that the "pool" of subscribers would contain many more ... likely healthy, young, spreading the risk around. The more the merrier in the world of insurance means lower costs for all in the pool. What about those middlemen?  They can still rake in bucks in Medicare Advantage and supplements, and depending on how it is structured, employer-provided insurance..  Medicare covers 80% of procedures now, and those who have the means could pay for a medigap (as some Medicare advantage plans offer), but at least those who do not will not go bankrupt or mortgage the house and they would have preventative care and cancer screenings and hospitals and providers will be assured they no longer have to write off non-pays or shift the cost to paying patients.  The largest pool would be if Medicare for All meant everyone, but a form could be just replacing the ACA with a medicare program that would be available to the self-employed, the unemployed,  young and healthy not covered by employers' insurance,  and the same requirements to cover preventative care, annual physicals, cancer screenings, and pre-existing conditions.. How the cost of prescription drugs would be handled is still an issue.  Whether it would be offered only to those of certain income levels is another issue. 

Killing off OBAMA care: GOP's stubborn subversion plan: remove subsidies

Update 11/10/2025: The vote yesterday, with the assistance of 8 Democratic senators who broke ranks, has some logic, but it also left Democrats without any leverage to secure funding for Obamacare next year. (Clearly, the GOP was not going to cave on Obamacare, so throw in the towel before people are hurt even more by the shutdown and Dems get the blame; quit while we are ahead) However, Democrats may have lost the battle, but they have a great chance to win the war. Democrats have at least laid the groundwork for a winning message in 2026.. making it clear who is responsible for destroying the only plan that makes affording insurance possible for those not covered by Medicare, Medicaid, or employers' insurance. The GOP has no plan...and their vote at least will be clearly recorded (in December on Obamacare subsidies), if the GOP leadership permits it, (no guarantees, there), leaving even more certainty that the GOP does not care a fig about their well-being.

Why the GOP is so obsessed with depriving needy people of access to health care is beyond me.. I have thought that the best thing that could happen politically for Democrats in 2026 is for each GOP Congressperson to be on the record with their vote on this issue in December. The "deal" struck by the eight Democrats to end the shutdown did not guarantee a vote on the ACA would even be taken. (Update: Speaker Johnson confirmed that in comments 11/10/2025; no guarantee there will be a vote) The pain caused by those hurt will be real and palpable, and angering. The tragedy will be that those needing health care will either go bankrupt or suffer if they are hit by a health crisis because they are insurance-naked until the Democrats take over the House and Senate in 2026. That the GOP also heartlessly used Snap as a political chip and the suffering of public employees not being paid, just adds to their reputation as cruel in their pursuit of favoring the rich.

The concepts floating out there in December will be Medicare for All (my choice), high risk pools (never worked where it has been tried) and bribing voters with money up to $2k in a useless health savings plan that does not cover anyone with a catastrophic illness or insurance price hikes on those with pre-exisitng condiitons, or just put it in their bank accounts to spend on whatever. (Trump's idea): pay more get less.MUFTIC FORUM BLOG: Trump's new concept for health care insurance. Pay retail and get less for your money..

The ACA was designed to do the major things: cover the afforbility gap for those who did not get insurance from employers, Medicare, Medicaid, but the cost of private insurance was too high for their income level (subsidies are based on income level), to spread risk around (the pool) so those with pre existing conditions could get insurance they could afford; and provide affordable access to preventative care and early diagnosis

So if you have sticker shock when you find out what the GOP has done to their health insurance affordability in 2026, and are thinking of going insurance naked until and if subsidies are restored. If so, get your annual physical before the first of the year, and mammograms and other expensive preventive measures before then, too. Likewise, move up any surgeries you can. I you have pre-existing conditions, lots of luck in finding anything you can afford. At least if you can get catastrophic insurance, do...and be prepared for humongous deductibles if anything major arises.. Got any young adult kids on your AKA insurance? Tough luck, kids. This is what going naked without AKA insurance means because you cannot afford the premiums. If you live in a rural area, pray your nearest ER is not shuttered. Also, be prepared to pay the ER charges for a visit. If you get put in the hospital, best of luck on paying off the bills.

Continuing with original post:

Those killing off Obamacare are from those states that need it the most. These GOP-controlled states ought to look after improving the health of their citizens, and instead, they are making access to good health care even more unaffordable. This map is damning: those with the worst life expectancy are mostly red states.

[OC] U.S. States by Life Expectancy at Birth in 2018-2021 : r/dataisbeautiful

The stubbornness of Trump and the GOP refusing to reverse themselves on Obamacare subsidies is puzzling, unless you view it in some context. Ever since John McCain blocked its death, the GOP has been trying to kill it off in some other way. They have found it: remove its subsidies so that it is unaffordable to anyone who is not wealthy. It is a mantra and it is very popular.ACA marketplace premiums are set to rise sharply in 2026—with median filings showing increases of ~15–18%, the highest since 2018. The victims are predominantly those who can no longer afford preventative care and even visiting a doctor when diseases are or could be diagnosed and treated can cause going bankrupt. The irony is that those states (NM excepted) with the lowest life expectancy are glaringly obvious: mostly red states: l. The GOP may think they are killing off hated socialized medicine and protecting big pharma and big insurers, but what they are doing is killing off more of their own constituents who need affordable health care, not less..

MUFTIC FORUM BLOG: The Democrats' making healthcare the issue in the shutdown may have unintended consequences

The ACA is not the best system for providing subsidies for health care access, but it is the only one we have, and there is no concept of a plan on the GOP's list of concerns or agenda. What this strategy of killing it off by removing subsidies is doing, making even their core supporters suffer, will eventually lead to desperation by their own voters and lead to what the GOP dreads most: Medicare for All. That or something similar can cut out the middlemen, share costs with the largest base of participants, and force big pharma to compete for business through a government process for all health care, depending on the details of the Medicare for All system. Obamacare (ACA) has filled in the gap between Medicaid and employer-provided insurance and made it possible for the self-employed to get insurance subsidized based on income and ability to pay.

However, this is not evidence that the Affordable Care Act “is failing.”

The data show that these increases stem primarily from rising medical costs, Republican-driven policy instability, and state-level refusal to expand Medicaid—not the ACA’s design..Following the map graphic are footnote data sources used for this conclusion.

reddit.com

From the dataisbeautiful community on Reddit: [OC] U.S. States by Life Expectancy at Birth in 2018-2021

Explore this post and more from the dataisbeautiful comm

1. Premiums are rising because Republicans destabilized the market.
• Repeated repeal attempts, litigation, and the 2017 termination of cost-sharing reduction payments drove insurers to hedge by hiking rates.
• Source: CBO / Wikipedia summary of CSR payment termination
2. Republican-led states blocked Medicaid expansion, raising costs for everyone.
• Non-expansion states now show 7 % higher ACA premiums on average and significantly worse uninsured rates.
• Sources: KFF—Status of State Medicaid Expansion Decisions; CBPP—Medicaid Expansion FAQs
3. Corporate favoritism worsened cost inflation.
• GOP opposition to drug-price negotiation and weak antitrust enforcement allowed pharma and hospital monopolies to raise costs unchecked.
• Source: Verywell Health—Why Health Insurance Costs Are Rising
4. Democrats stabilized and expanded coverage.
• Under Democratic leadership, subsidies were enhanced and coverage expanded to record levels, even as the GOP blocked long-term fixes.
• Sources: KFF—ACA Premiums Up 18 % in 2026; Health System Tracker—Drivers of 2026 Premium Hikes

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• “Premiums aren’t going up because of Obamacare — they’re going up because Republicans never stopped trying to break it.”
• “In states where Republican leaders blocked Medicaid expansion, working families pay more for coverage.”
• “When Republicans side with Big Pharma and hospital monopolies, middle-class Americans pay the price.”

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1. KFF: Why ACA Premiums Are Rising in 2026 (Aug 2025)
2. KFF: Preliminary Rate Filings Show Largest Increases Since 2018
3. AJMC: ACA Premiums Up 26 % Before Subsidy Expiration
4. CBPP: Medicaid Expansion & Coverage Gaps
5. HealthCare Dive: ACA Plans Could Spike in 2026

 

The Democrats' making healthcare the issue in the shutdown may have unintended consequences

The unintended consequence may in the long term be a total overhaul of health care affordability and the role government plays. The red states are the most harmed by the misnamed Big Beautiful Bill, and it may be a wake-up call that leads eventually to Medicare for All.

If it does not, the red state politicians can at least make sure both Medicaid and the ACA are workable because the alternative, letting the lower-income brackets go without health care accessibility and affordability, will be politically untenable and viewed as inhumane. It will be expensive for those who have health insurance, as the cost of medical care by the emergency room will be passed on to them. covered by higher costs and bigger bills for them. Those are the reasons that the ACA, Obamacare, was passed and now has more public approval than ever.

Update: 11/5/2025 MUFTIC FORUM BLOG: Killing off OBAMA care: GOP's stubborn subversion plan: remove subsidies   Their plan: subvert it by making premiums so expensive by removing subsidies, no one can afford it.

Update 10/29/25: a good analysis of the impact of the BBB on Obamacare/ACA: Americans Are Getting a Look at Next Year’s ACA Premiums and Many Don’t Like It

Continuing with the original post

That Democrats in Congress are making health care cuts the issue in the shutdown is a moral one....but it is also aiming at the soft belly of MAGA-run red states. Steve Rattner on Morning Joe this morning presented some extremely fascinating statistics in graphs that show the negative impact of the BBB on healthcare will hit the red states in the South the worst. Especially harmed were states that refused to expand Medicaid coverage when they had a chance in the Biden and Democratic administrations. Using Obamacare (the ACA) to fill in the gap they left in so many uninsured and now they will have the largest increase in their state ACA programs, more so than blue states, because the subsidies to make the ACA affordable have been taken away by the Big Beautiful Bill. Those of us in blue states will also feel the pain.... That is the short-term political dilemma that the GOP is finding itself in.

In the long term, the ACA will have to be replaced, because it has not resulted in the profit-driven health insurers reducing costs...and instead, the ACA is just a method to help consumers afford the private insurers' unbridled greed. The only way out is a Medicare for All kind of a program that has a huge advantage: the pool of insured becomes the whole country...an average that includes both the sick, elderly and the healthy, spreading the risk around and reducing the cost for everyone. There will come a time when Americans will realize that their fear of socialism will be eclipsed by the need to cope with the cost of modern medicine, and they will rise up and demand it. I am not sure we are there yet, but the BBB BS by an uncaring GOP may be a catalyst for voter attitude changes, it is so jarring and harmful.

msn.com

Steve Rattner: Red states use Obamacare more; health care cuts hit red states hardest

Morning Joe economic analyst Steve Rattner discusses how the government shutdown is impacting health care.