More Affordable Care Act

Summary of the "More Affordable Care Act" Bill

This is a proposed U.S. Senate bill (S. ll in the 119th Congress, 1st Session) introduced by Senator Rick Scott of Florida. It's a short, targeted piece of legislation aimed at giving states more control over their health insurance systems, reducing federal mandates from the Affordable Care Act (ACA, or Obamacare), and redirecting federal subsidies into personal savings accounts for healthcare. The goal is to make coverage more affordable and flexible by letting states experiment with their own approaches. Below, I'll break it down into plain English sections, based on the bill's full text.

Overall Purpose

The bill, titled the "More Affordable Care Act," would let willing states opt out of key ACA rules starting in 2026. In exchange, states must run a safety-net program (like a high-risk pool) to protect people with expensive health needs from driving up premiums for everyone else. Federal money that would have gone to ACA subsidies gets rerouted to new "Trump Health Freedom Accounts" (personal savings accounts) for eligible residents. This setup promotes state innovation, competition in insurance markets, and consumer choice, while keeping core protections like bans on denying coverage for pre-existing conditions.

Key Section: Health Freedom Waiver Program (Adds a New ACA Section 1335)

• How It Works: States can notify the federal government (via the governor or a majority vote in the state legislature) at least 90 days in advance if they want to join. Once approved, the waiver kicks in on January 1 of the chosen year and stays active until the state opts out. No lengthy application or approval process—just a simple notice with proof of a high-risk pool.

• What Gets Waived? States can ditch these major ACA requirements for health plans in their state:

  • Rules for setting up and running health insurance Exchanges (marketplaces where people buy plans).
  • "Essential health benefits" mandates (forcing plans to cover specific services like maternity care or mental health).
  • Premium tax credits and cost-sharing reductions (subsidies to lower premiums and out-of-pocket costs).
  • The individual mandate (the old tax penalty for not having insurance).

• Federal Funding Shift ("Money Follows the Person"): If a state waives subsidies, the feds calculate what those folks would have gotten nationwide (based on average silver-plan premiums in non-waiver states). That cash goes straight into Trump Health Freedom Accounts for eligible residents—in monthly, quarterly, or lump-sum payments. Eligible people are those who would qualify for ACA help but now buy coverage through the state's system.

• Insurance Market Flexibility:

  • States can run their own Exchange, let private companies operate sales platforms (approved by the state insurance commissioner), or fall back on a federal Exchange—but with state rules overriding waived ACA parts.
  • The feds provide tech tools (like application software) to help private platforms.
  • Plans approved by the state can be sold across all waiver states, boosting competition.
  • Insurers can offer "child-only" plans just for kids under 21.

• Built-in Safeguards:

  • States must have a high-risk pool or similar program to keep premiums stable for sick people.
  • No waiving consumer protections under the Public Health Service Act—like guaranteed coverage for pre-existing conditions, no lifetime limits, or coverage for preventive care.
  • The feds must create a streamlined process to bundle these waivers with other health program requests (e.g., Medicaid changes).
  • Regulations to implement this must be finalized within one year of the bill passing.

Key Section: Trump Health Freedom Accounts (Adds to the Tax Code, Section 223)

• What They Are: These are like supercharged Health Savings Accounts (HSAs)—tax-free savings for medical costs. They're only available to people in waiver states who buy qualifying health plans.

• How Funding Works: Filled with the redirected federal subsidy money (as described above). These deposits don't count against your annual HSA contribution limits.

• Big Perks:

  • You can use the money to buy health insurance directly (normal HSAs can't do that).
  • No income or other eligibility hurdles beyond living in a waiver state and enrolling in a plan.
  • If you have one of these, you can't have a regular HSA—it's all-in on this system.

• Tax Treatment: Earnings grow tax-free, and withdrawals for qualified medical expenses (including insurance premiums) are tax-free. (The bill cuts off mid-sentence here, but it aligns with standard HSA rules.)

Potential Impact and Scope

This bill doesn't overhaul the entire ACA—it just carves out an opt-in path for states that want more freedom. It could lower costs in competitive markets but relies on states stepping up with risk pools to avoid "death spirals" (where healthy people leave, premiums skyrocket). It's named after former President Trump, nodding to his past pushes for ACA repeal/replace efforts. The bill was referred to the Senate committee for review, but as of now, it's not law—just a proposal.

In short: States get to hit "reset" on Obamacare's red tape, people get personal pots of federal cash for healthcare, and the system stays protective for the vulnerable. If passed, it could spark a patchwork of state experiments in health coverage.