Republicans to Blow Up Dems' Healthcare Plans with New Proposal, Shift Power from Insurers to Consumers

Republicans are striking back against Democrat demands to keep pouring taxpayer dollars into Obamacare, instead advancing consumer-focused reforms that redirect power away from insurance companies and back to individual Americans.

The clash over healthcare policy has become the central fault line in the record-breaking government shutdown, driven by Democrats’ refusal to compromise on extending the “enhanced” Obamacare premium subsidies they muscled through in 2021 without a single Republican vote. Those subsidies, which expire at the end of 2025, funnel billions into the coffers of insurers—an industry that critics say has grown fat off government favoritism since the Affordable Care Act first took effect.

The House voted to reopen the government using a Senate-passed package that does not extend those boosted subsidies. Although Senate Majority Leader John Thune has offered Democrats a standalone vote on their subsidy-extension bill, it is almost certainly doomed given strong Republican opposition.

Skeptics of the Affordable Care Act point to grim math: premiums on ACA exchanges have risen nearly twice as fast since 2014 as those in employer-sponsored plans. Extending the subsidy expansions would cost up to $350 billion over the next decade, according to the Congressional Budget Office.

Thune put it bluntly: “Obamacare, since its inception, has consistently seen premiums go up for the people in the individual marketplace by amounts that are just… not sustainable. We need some fixes. We need some solutions.”

Leading the policy charge is Sen. Bill Cassidy of Louisiana, who chairs the Senate committee overseeing health policy. His approach: cut insurers out of the middle and give the money directly to consumers.

Cassidy proposes routing federal funds into Flexible Spending Accounts, letting Americans use pre-tax dollars for medical costs while ensuring their federal support isn’t siphoned off by insurance-industry overhead.

“What I’ve been advocating is that we redirect the subsidies into Flexible Spending Accounts, and it could be the same amount of money per person, but it would be in an FSA, not going to the insurance company,” Cassidy said Monday. “When you send it to the insurance company, they take 20 percent of that for overhead and profit — pretty high carrying cost. You send it to the patient, almost all of it’s going to go for direct health care.”

Sen. Rick Scott is working on a related plan to create “HSA-style accounts,” arguing that more consumer control will “increase competition [and] drive down costs.”

The idea has the public backing of President Donald Trump, who urged Republicans to prioritize Americans over insurance conglomerates. Extending Democrats’ expanded subsidies, Trump warned, would hand insurers “another huge payday at the expense of the American people.”

While GOP leaders have not yet endorsed a single plan, the influential Paragon Health Institute has long advocated redirecting subsidies toward consumers rather than insurers. In 2022, Paragon published a policy roadmap that aligns closely with the direction Republicans are now pursuing.

Paragon’s approach includes restoring federal funding for insurer-mandated Cost-Sharing Reductions (CSRs)—payments originally designed to offset discounted deductibles and copays for certain enrollees. When the federal government stopped covering those costs in 2017, insurers boosted premiums to compensate, driving up both consumer costs and federal spending on subsidies. Restoring CSR funding would reverse that trend, lowering premiums and reducing deficits by roughly $31 billion, according to the CBO.

The think tank also proposes giving eligible enrollees the option to receive CSR assistance as deposits into Health Savings Accounts, letting individuals—not insurance companies—decide how best to manage their healthcare expenses.

Paragon President Brian Blase told the Daily Caller News Foundation: “The whole policy combination would lower premiums, lower deficits and give lower-income Americans more control over their health insurance. It is the best thought-out immediate policy that can be put in place to align with the president’s vision.”

GOP lawmakers in the House are pushing similar ideas. Reps. Greg Steube and Kat Cammack introduced legislation allowing qualified individuals to receive direct HSA contributions. Their bill—dubbed the “Big Beautiful Bill”—would have routed CSR program funds to taxpayers rather than insurers, but the Senate parliamentarian blocked it.

Democrats, meanwhile, accuse Republicans of trying to “overhaul” Obamacare.

“The future is unpredictable, but we need to continue our fight unequivocally, unyieldingly for affordable health care insurance through extending the subsidies and other measures under the ACA,” said Sen. Richard Blumenthal, who also claimed that “Republicans have a reflexive obsession with repealing or destroying the ACA.”

But Republicans say the real fight is about 2026, not relitigating 2010.

“What we’re talking about — this is not rewriting big portions of the Affordable Care Act,” Cassidy said. “We’re looking very specifically at what we can do for Plan Year 2026.”

Paragon’s Blase agreed that broader reforms remain a long-term project. “I’m looking at what can be done in the next few months,” he said.

Some Republicans are eager for a high-profile policy showdown, arguing that Democrats are positioning themselves as defenders of insurance-industry payouts.

“If they don’t want to take this money away from insurance companies and flow it back to the consumer, that’d be a great fight to have,” said Sen. Lindsey Graham.

With President Trump signaling full support for a consumer-first overhaul, Republicans appear ready to force Democrats to defend the status quo: more government subsidies, higher premiums, and bigger profits for insurance companies.