GOP senator proposes advance tax credits to tackle rising out-of-pocket healthcare costs
EXCLUSIVE: The leader of the Senate's healthcare-focused committee on Tuesday released a plan that would aim to make healthcare coverage more affordable for Americans, in part by giving them money in advance to cover out-of-pocket expenses.
Sen. Bill Cassidy, R-La., the chairman of the Senate Health, Education, Labor and Pensions (HELP) Committee, told FOX Business that, given reports that many American families wouldn't have $1,000 to cover expenses from a medical emergency or unanticipated expense, "We've got to put money in people's pockets to pay for their out-of-pocket."
His proposal would give individuals more money in advance to cover out-of-pocket costs through refundable tax credits that could amount to as much as $2,000 for a family of four. Those dollars would go into a health savings account (HSA) that would be available to help the account holder to cover deductibles under their health plan or out-of-pocket expenses.
"What's really novel here is putting more money in people's pockets with an advanceable tax credit, pre-funding a health savings account," Cassidy said. "Right now you're more incentivized to have a health savings account if you're in a higher tax bracket. In this case, we're pre-funding, so even if you aren't in a higher tax bracket, it's pre-funded for you."
He said the pre-funded HSAs would make it easier for a household to get a health insurance policy that has lower premiums and is primarily focused on big ticket items by giving them greater means to cover standard expenses with the funds in their HSA.
"It's a virtuous cycle that ends up in many ways benefiting the patient's health and benefiting their pocketbook," Cassidy said.
The Senate HELP committee chairman said his plan would also build on efforts by the Trump administration at the federal level to promote price transparency in the healthcare industry, which requires the costs of procedures like X-rays to be disclosed. With those costs disclosed, he sees it being easier for Americans to find the most affordable option and ultimately cover those expenses with the pre-funded HSA.
"Oftentimes, they'll be paying with this pre-funded health savings account, and they'll have the tools to find the best price because federal legislation has mandated these prices be made available, and the private sector has developed the kinds of apps that can steer them to the best place," he said.
Cassidy's plan also looks to empower Americans with knowledge about the foods they're consuming by changing labels to signify the level of health risk an item poses.
"The label I have an idea of would be very simple – you look at the label: is this more or less likely to cause diabetes? Green would be less likely, red would be more likely, and yellow would be somewhere in between. And you could just look at the food. You don't have to read a table, you don't have to kind of figure out what percent of my daily allowance this is," he said.
"Ultimately though, it's about giving power to the patient over a pocketbook, power to the patient in terms of knowing the prices of things, power to the patients with these apps that people are developing, and then power to the patient with information," Cassidy added.
OBAMACARE ENROLLMENT FELL BY MORE THAN 1M ENROLLEES FOR 2026
Americans have listed healthcare as one of their top concerns as voters prepare to head to the polls for this November's midterm elections that will determine control of Congress. Cassidy is among the senators up for re-election, and he faces a Republican primary election in Louisiana before he can advance to the general election this fall. President Donald Trump has endorsed one of Cassidy's challengers, Rep. Julia Letlow, in the race.
A recent Fox News poll found that 81% of voters said they were "extremely" or "very" concerned about healthcare. Those findings were similar to those of a poll by Gallup, which found that healthcare topped the list of domestic policy issues for the first time since 2020.
"There is a moment that demands an answer, there's different things going on for gasoline and groceries, but for healthcare we need an answer," Cassidy said. "I think this is a good answer because it builds upon things we already have in place, it doesn't try to remake the healthcare system. Obamacare tried to remake the healthcare system and arguably the problems of affordability have gotten worse."
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Cassidy's announcement comes as the Senate HELP Committee is scheduled to hold a hearing on Thursday regarding ways to make prescription drugs more affordable for families through free market approaches, such as increased competition among generic and biosimilar manufacturers.