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Over the Nov. 8–9 weekend, seven Senate Democrats (and one Independent) agreed to advance a continuing resolution (CR) to reopen the federal government. In return, they secured a commitment for a December vote to extend the enhanced Affordable Care Act (ACA) subsidies, the trigger for the record shutdown. While several factors contributed to the agreement, one likely catalyst was an alternative proposal by Senator Bill Cassidy (R-Louisiana).
In lieu of extending the enhanced subsidies, Senator Cassidy called for direct payments to ACA recipients in pre-funded Flexible Spending Accounts. The money could be used to pay premiums or out-of-pocket payments. Details of his proposal are scant, but the idea has garnered significant attention. President Trump supports the concept.
The underlying philosophy is that recipients are better off controlling their own health care dollars rather than relying on a system where the federal government prepays insurance companies for costly coverage that often goes unused.
While it remains to be seen what, if any, compromise the GOP makes on further extending subsides for ACA enrollees, a largely unnoticed change is going to occur next year when it comes to the ACA and Health Savings Accounts (HSAs). In the One Big, Beautiful Bill Act (OBBBA), Congress made all bronze-level and catastrophic ACA plans eligible for HSAs.1 The aim was to offer ACA recipients an alternative to the high-premium plans that are currently the default option on the marketplace exchanges. Instead, ACA recipients could choose plans that allow them to save pre-tax dollars in an HSA to be used for future health care costs.
While the OBBBA change has garnered relatively little attention, it marks a dramatic change from the past decade where ACA rules increasingly discouraged recipients from choosing HSA-eligible plans.
The plot
Our plot this week shows the impetus for OBBBA’s ACA reform.
From 2014 to 2025, the number of ACA enrollees who opted for HSA-eligible plans declined from 8 percent to just 2 percent. The steep decline was due to a technical (and likely unintended) difference in indexing between HSA-compliant plans and ACA plans.2 In short, maximum-out-of-pocket (MOOPs) limits rose faster among ACA plans than HSA-compliant plans. That meant that the number of HSA-eligible ACA plans was quickly approaching zero; from 2014 to 2025, the share of eligible plans fell from 11 percent to 2 percent.3
The red bar in our plot represents quite the change. If we assume the same share of enrollment in catastrophic and bronze-level ACA plans as in 2025, then the number of enrollees in HSA-eligible plans will jump to over 30 percent. The change means more than 5 million Americans now have greater access to HSAs.4 It could be even more if the reform encourages individuals to switch from higher-premium silver plans to a bronze plan.
The point
Will ACA recipients contribute to HSAs now that they have broad access? We think some will. HSAs are already popular among those with employer coverage; about 60 million Americans already benefit from these plans.
Senator Cassidy may be on to something more revolutionary. Rather than simply giving individuals an option to contribute to these accounts, lawmakers could find ways to shift existing subsidies to savings accounts that are owned by recipients. This would not only give individuals more choice; it would also encourage patients to be more cost-conscious when using health care services. And those who don’t file any health care claims would end up with money left in their accounts at the end of the year, as opposed to the current system where insurance companies pocket the difference.
High-premium, low-copay health insurance gives patients little reason to consider the actual costs of their health care. In contrast, when the money belongs to individuals, they have a stronger incentive to weigh the value of their health care choices.
Read more
We discuss several ways to empower patients in our Choices for All Project. In particular, we explore various ways we could fund savings accounts for ACA and Medicaid recipients for the purchase of health care services.
Bronze-level plans are intended to cover about 60 percent of total health care spending.
Specifically, ACA MOOP limits were indexed to premium growth rates while high-deductible health plans (those that qualify for HSA plans) were linked to overall price increase. We discussed the issue in more detail here.
These numbers are derived from the Center for Medicare and Medicaid Services (CMS) 2014-2025 OEP Plan Design Public Use File in their 2025 Marketplace Open Enrollment Period Public Use Files.