A new legislative proposal in the U.S. Senate aims to replace expiring Affordable Care Act (ACA) subsidies with direct deposits into Americans' health savings accounts. The bill, introduced by Republican Senators Mike Crapo and Bill Cassidy, would provide up to $1,500 for individuals to cover medical expenses, setting the stage for a significant policy debate over the future of healthcare funding.
This proposal comes as enhanced ACA tax credits, which have lowered insurance premiums for millions, are set to end in 2025. The new plan offers a different approach, shifting financial support from insurance companies directly to consumers, but raises questions about its adequacy in covering rising medical costs.
Key Takeaways
- A Republican bill proposes depositing $1,000 to $1,500 into Health Savings Accounts (HSAs) for eligible Americans in 2026 and 2027.
- This plan would replace the enhanced Affordable Care Act (ACA) subsidies that are scheduled to expire at the end of 2025.
- Eligibility is tied to income and enrollment in specific high-deductible health plans.
- Critics argue the proposed amount is insufficient to cover average deductibles for these plans, which can exceed $7,000.
- The Senate is expected to vote on this bill alongside a Democratic proposal to extend the current ACA subsidies for three years.
Details of the Proposed Health Savings Plan
The Crapo-Cassidy bill outlines a specific framework for distributing funds. Under the legislation, eligible individuals aged 18 to 49 would receive $1,000 per year, while those aged 50 to 64 would receive $1,500 per year. These payments would be deposited directly into a Health Savings Account (HSA) for the years 2026 and 2027.
To qualify, individuals must be enrolled in either a bronze-level or catastrophic health plan under the Affordable Care Act. The proposal also includes an income cap, limiting eligibility to those earning up to 700% of the federal poverty level. For 2025, this translates to an annual income of $109,550 for an individual or $225,050 for a family of four.
Proponents state the bill is designed to empower patients by giving them direct control over their healthcare dollars, rather than channeling funds through insurance providers. The legislation also contains specific restrictions, prohibiting the use of these funds for abortion or transgender services.
Comparing the Proposal to Current Healthcare Costs
While the direct payment is intended to help with out-of-pocket expenses, its impact is being heavily scrutinized against the backdrop of current medical costs. A central point of concern is the high deductible associated with the required health plans.
High Deductibles vs. Proposed Aid
According to a 2026 analysis from KFF, a health policy nonprofit, the average deductible for an individual bronze ACA plan is $7,476. This amount, which a consumer must pay before most insurance coverage begins, is nearly five times the maximum $1,500 payment proposed in the bill.
Health policy experts have voiced concerns that the plan may not provide enough financial protection for many Americans, particularly those with ongoing health issues.
"This might work for folks who are very healthy," said Sabrina Corlette, co-director of Georgetown University's Center on Health Insurance Reforms. "But for anybody with a chronic condition, this is not going to get you very far."
Although ACA plans are required to cover certain preventive services at no cost, the gap between the proposed HSA deposit and the average deductible could leave individuals facing substantial bills for unexpected illnesses or injuries.
The Broader Debate on Healthcare Subsidies
This proposal is part of a larger political battle over the future of the Affordable Care Act. The enhanced tax credits, implemented during the COVID-19 era, are credited with making health insurance more affordable for approximately 22 million Americans. If these subsidies expire as scheduled on January 1, 2026, average costs for those individuals are projected to more than double.
How Health Savings Accounts Work
Health Savings Accounts (HSAs) are tax-advantaged savings vehicles paired with high-deductible health plans. Contributions are made with pre-tax dollars, and the funds can be used for a wide range of qualified medical expenses. Any unused money rolls over from year to year and can be invested, with tax-free growth and withdrawals for eligible expenses.
The Republican bill aligns with a concept supported by former President Donald Trump, who has expressed a preference for sending money directly to consumers. "I love the idea of money going directly to the people, not to the insurance companies," Trump stated recently, indicating his approval of the bill's approach.
The Senate is now positioned for a critical vote, with Democrats pushing a separate proposal to extend the current ACA subsidies for another three years. The outcome will directly impact the financial health of millions of Americans who rely on the ACA marketplace for their insurance coverage.
The Rising Cost of Employer-Sponsored Insurance
While the debate in Congress focuses on the ACA marketplace, a separate but related issue is the rising cost of healthcare for the majority of working-age Americans. About 154 million people in the U.S. receive health coverage through their jobs, and they are also facing significant financial pressures.
- The average cost for a family health insurance plan through an employer reached $26,993 in 2025.
- This represents a 6% increase from the previous year.
- For comparison, wages grew by 4% and inflation was 2.7% during the same period.
This trend highlights a widespread affordability crisis in American healthcare. A November survey by West Health-Gallup revealed that nearly half of all U.S. adults are worried they will not be able to afford necessary medical care in the coming year. The decisions made in Congress regarding ACA subsidies will unfold against this backdrop of widespread financial anxiety over healthcare costs.
