US healthcare costs set to leap as senators fail to reach deal

The US Senate has failed to advance a plan to lower healthcare costs, increasing the likelihood health insurance premiums will soar for more than 20mn Americans as Donald Trump races to reassure voters about the cost of living.

The Senate held back-to-back votes on Thursday on separate Democrat- and Republican-authored plans to address rising healthcare costs. But neither proposal garnered the 60 votes required to clear the upper chamber of Congress’s filibuster threshold.

The lack of progress has fuelled concerns that lawmakers will be unable, or unwilling, to strike a deal before December 31, when government subsidies known as enhanced premium tax credits are set to run out. The tax credits apply to the nearly 22mn Americans who are enrolled in health insurance under the Affordable Care Act, or Obamacare.

A failure to reach an agreement will lead to a sharp rise in healthcare bills across the country as affordability emerges as a pivotal issue ahead of next year’s midterm elections, when Republicans will aim to hold on to control of both chambers of Congress.

An AP-NORC poll published on Thursday found just 31 per cent of US adults approved of Trump’s handling of the economy, down from 40 per cent in March, while just 29 per cent approved of his handling of healthcare.

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The White House and many congressional Republicans have been loath to extend the Obamacare tax credits, which they say amount to a handout for insurance companies in a system rife with fraud and abuse.

On Thursday, Senate Republicans offered a bill that would have given many lower- and middle-income Americans up to $1,500 a year in payments for health saving accounts, instead of renewing the existing subsidies.

But Democrats refused to endorse the measure and instead pushed their own proposal that would have extended the tax credits for another three years. While four Senate Republicans joined all Democrats to back the three-year extension, the bill still fell nine votes short of the 60-vote threshold.

“Our bill is the last train to leave the station,” Chuck Schumer, the top Senate Democrat, said before Thursday’s vote. “If Republicans don’t climb aboard, there won’t be another chance to act before premiums skyrocket next year.”

If Congress allows the subsidies to expire, monthly healthcare premiums will double, on average, for the more than 20mn Americans who rely on them. According to KFF, a non-profit health policy research group, the average annual premium payment will rise from $888 to $1,904.

But costs will climb even more for millions of Americans. For example, premiums for a 60-year-old making roughly $60,000 annually in either Wyoming or West Virginia are set to jump by more than 400 per cent, according to KFF.

White House press secretary Karoline Leavitt on Thursday insisted Trump was “prepared to take action on healthcare” but did not elaborate on a plan. Instead, she blamed Democrats for the looming premium cliff.

“Democrats are now pretending they want a solution to this issue, but they created the problem,” Leavitt said. “The president and Republicans are currently coming up with creative solutions and ideas to lower healthcare costs for the American people, and you’ll continue to hear more from them on that.”