Centers for Medicare & Medicaid Services (CMS) Administrator Dr. Mehmet Oz indicated Sunday that enhanced subsidies under the Affordable Care Act (ACA) may be extended, if moves are made on addressing systemic issues.
Oz, speaking on CNN’s State of the Union, confirmed that “There are discussions around extending the subsidies, if we deal with the fraud, waste, and abuse that right now is paralyzing the system”. The possibility of an extension is being weighed as Republicans scramble to address soaring healthcare costs following losses in recent off-year elections, which placed the issue of affordability front and center.
The enhanced ACA subsidies, initially enacted during the pandemic, were a key sticking point during the recent government shutdown. Without an extension before the new year, insurance costs for consumers are expected to “more than double”. Consumers utilizing ACA plans must prepare to pay skyrocketing premiums in a matter of weeks.
Dr. Oz emphasized that the administration is working on finding solutions that will sustain the system for decades. He noted “many ideas are out there,” including some designed to overhaul the ACA and others that will not replace it.
President Donald Trump has previously suggested that direct payments could take the place of existing tax credits that offset insurance costs on ACA marketplaces. Oz added that the president is “laser focused on this” and that it is the main topic of their conversation. Other cost-reduction methods highlighted include addressing reinsurance and prescription drug pricing.
Speaking on “The Sunday Briefing’ with Peter Doocy, Oz gave some outline of the principles a new approach would follow.
“People will decide which doctors they want to keep. They’ll pay for the programs they think are most valuable to them. We can save enough money in the ACA as it’s currently structured if we adjust where the money’s invested and drive prices down… to actually give people some money back, and we want that,” said Oz.
The political consequences of allowing the subsidies to expire are significant, as they would disproportionately affect Republican-leaning states. The Congressional Budget Office (CBO) estimates that about 4 million more people would become uninsured by 2034 if the subsidies lapse. Furthermore, eight of the 10 states receiving the highest share of ACA subsidies are Southern states that voted for Trump in the last election, including Texas, Florida, and Georgia, along with Utah and Wyoming. KFF data suggests that the resulting increase in health insurance bills could be enough to “swing a close election” in some districts.