Americans to get automatic $1,500 checks under new December ‘insurance’ bill

MILLIONS of Americans may see automatic payments worth up to $1,500 pad their wallets as lawmakers discuss a new insurance bill this month.

Senate Republicans are considering distributing these checks to Americans to help cover healthcare costs rather than extending the enhanced Affordable Care Act subsidies that were at the center of the government shutdown.

Democratic lawmakers have been fighting hard to extend the enhanced tax credits that offered significant discounts on health premiums under the Affordable Care Act, or Obamacare.

These COVID-19-era credits, set to expire on December 31, 2025 should Congress not intervene, were temporarily enhanced by the American Rescue Plan Act of 2021 and extended by the Inflation Reduction Act of 2022.

When the enhanced tax credits expire, the average costs for 22 million people on subsidized ACA insurance will more than double in the new year, per health policy nonprofit KFF.

In a new proposal from Republicans called the Health Care Freedom for Patients Act, Senators Mike Crapo and Bill Cassidy revealed a bill on Monday that would deposit $1,000 to $1,500 into health savings accounts, or HSAs, for qualifying Americans.

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The Senate is set to vote on this bill as well as Democrats’ proposal to extend the expiring enhanced subsidies for three years on Thursday.

If the Crapo-Cassidy bill passes, the government would deposit $1,000 into an HSA for Americans age 18 to 49, while those ages 50 to 64 would get $1,500.

The deposits would go out in 2026 and 2027, but only to Americans who earn up to 700% of the federal poverty level, which translates to $109,550 for an individual or $225,050 for a family of four in 2025.

The bill, which bans the money from being spent on abortion or transgender services, also requires that consumers be enrolled in a bronze or catastrophic Affordable Care Act plan.

What’s happening with the subsidies?

Enhanced federal subsidies for health insurance purchased through the Affordable Care Act marketplace may soon expire.

The ACA established Premium Tax Credits, often called subsidies, to help reduce the cost of monthly health insurance premiums for Americans purchasing coverage on federal and state marketplaces.

Congress temporarily expanded these subsidies, first through the American Rescue Plan Act and then through the Inflation Reduction Act until the end of 2025.

These enhancements aimed to increase financial aid and expand eligibility for more middle-income households.

These enhanced subsidies are currently scheduled to expire on December 31, 2025, although congressional Democrats are fighting to extend them – a key point of contention during the government shutdown.

If the subsidies do expire, millions of Americans will see a huge jump in their monthly premiums beginning next year because the financial assistance will revert to the lower, original ACA levels.

In a one-page description of the legislation, Republicans lawmakers said it would give cash to patients rather than insurance companies and reduce health insurance premiums and health care costs.

“I love the idea of money going directly to the people, not to the insurance companies, going directly to the people,” said President Trump on Tuesday.

“It can be in the health savings accounts, it can be in a number of different ways.”

I love the idea of money going directly to the people, not to the insurance companies.”

President Trump

Data shows that HSA deposits ranging from $1,000 to $1,500 would not be enough to cover the average deductible for the majority of ACA bronze or catastrophic plans.

The average deductible next year for an individual bronze ACA plan is expected to be $7,476, per a KFF analysis.

FSA vs HSA

Flexible Spending Account (FSA):

• Funds must be spent by the end of the plan year or are forfeited to the employer
• Employer can optionally offer a grace period up to 2.5 months or a carryover up to $660 in 2025
• Must be offered through an employer-sponsored health plan
• 2025 contribution limit is $3,300

Health Savings Account (HSA):

• Money rolls over year-to-year, even if you change jobs or health plans
• Must be enrolled in a High-Deductible Health Plan
• 2025 contribution limit is $4,300 for individual or $8,550 for families

As a result, health care experts have argued that passage of the Crapo-Cassidy legislation could leave Americans with hefty out-of-pocket costs when they visit the doctor or hospital.

“This might work for folks who are very healthy,” Sabrina Corlette, co-director of Georgetown University’s Center on Health Insurance Reforms, told USA Today.

“But for anybody with a chronic condition, this is not going to get you very far.”