Congressional Republicans Are Working on a Health Package

Republican lawmakers in both the House and the Senate have begun work on a health package for Congress to consider after the federal government reopens. President Trump said the effort should also include Democrats, saying a “much better than Obamacare” law can be developed.

The effort is in its early stages, and formal committee work and negotiations are on hold until after Congress finally resolves federal government shutdown, and possibly until after lawmakers put together government funding for all of fiscal year (FY) 2026. But it is possible a health package could come together in time to be included in the FY 2026 funding legislation, which has to be done, per the terms of the new continuing resolution (CR), by January 30, 2026.

Among the issues identified as possible ways to improve access to quality health care at a reduced cost are:

• Enhanced HSAs: Many in the GOP are touting bigger tax-deductible contributions to health savings accounts (HSAs) along with lower out of pocket cost limits on the high-deductible health plans (HDHPs) that must accompany HSAs.
• More robust association health plan (AHP) rules: Another GOP proposal is to strengthen AHPs, plans under which small businesses and self-employed individuals can band together to purchase more affordable health insurance coverage.
• More incentives for low-cost health insurance: Republican lawmakers are discussing incentives for “bronze” and catastrophic-only health coverage, as well as short-term limited duration (STLD) health insurance.
• Subsidies for low and moderate income health insurance buyers: Democrats are pushing hard for extension of current law enhanced Affordable Care Act (ACA) premium tax credit (PTC) subsidies. Some Republicans are willing to consider this, with modifications. Possible modifications include a mandatory premium payment by the insurance purchaser, a limit on eligibility to the enhanced PTCs to only those who already qualify for them (grandfathering), a ban on abortion coverage in insurance paid for with PTCs, and a short-term extension (one or two years).
• ICHRAs: Many Republican lawmakers also want to improve the rules and incentives for individual choice health reimbursement arrangements (ICHRAs). Among the enhancements under discussion is an increase in tax deductible ICHRA contributions.

Also in play in this initiative are new rules applicable to pharmacy benefits managers, modifications to both Medicare (especially Medicare Advantage) and Medicaid, and rules that would send subsidy funds to individuals rather than to health insurance companies.

Prospects: Health reform is a top priority for both Democrats and Republicans (and, in the case of the PTC enhancements, was at the heart of the Democratic position on the government shutdown). But presenting a challenge for action on a health care package is the need Congress now faces to authorize fiscal year (FY) 2026 discretionary funding for the federal government. So, while it is possible a health package will emerge prior to the end of 2025, the likelihood is that it will take well into 2026 before a package can move through the legislative process.

NAIFA Staff Contacts: Mike Hedge – Senior Director – Government Relations, at mhedge@naifa.org; or Jayne Fitzgerald – Director – Government Relations, at jfitzgerald@naifa.org.