Republican Gubernatorial Candidate John James Supports Healthcare Reform Proposal
Michigan Representative John James, now running for governor, has expressed support for a Republican initiative aimed at replacing the Affordable Care Act (ACA), commonly known as Obamacare, with health savings accounts (HSAs). However, experts caution that this change might result in increased premiums and reduced coverage.
During a November 10 event organized by Americans for Prosperity—an organization known for its opposition to Obamacare—James endorsed a bill proposed by Florida Senator Rick Scott.
“I talked to my buddy Rick Scott who came to Macomb last week,” James stated. “He’s actually working on a bill with President Trump saying that he’s going after the insurance companies that are stealing from you … The Republican plan is giving health savings accounts. Thousands of dollars going to you directly rather than going to insurance companies.”
To fully grasp the potential impact of Scott’s bill, one must first understand the current dynamics of Obamacare and the health insurance market.
Private insurers mitigate medical costs by distributing them across a large group, a process known as risk pooling. Typically, most individuals in these pools are healthy and require minimal medical care. The premiums paid by these healthy individuals help cover the expenses of sick individuals or those needing costly treatments.
Obamacare encourages the purchase of private insurance by offering subsidies that reduce premium costs, thus maintaining broad risk pools and stable premiums. These insurance policies are available through government-managed exchanges.
Senator Scott’s proposal, called the More Affordable Care Act, suggests that some individuals eligible under Obamacare could receive a government-funded HSA. These accounts would function like bank accounts, allowing funds to be used for insurance plans or some out-of-pocket medical expenses.
“This bill would use HSA-style Trump Health Freedom Accounts to put health care decisions in the hands of Americans,” Scott’s office announced. “Under Senator Scott’s proposal, Obamacare will continue, Healthcare.gov and state exchanges will continue, protections for pre-existing conditions remain in place, and families who need a safety net have one that works for them.”
However, Tim Layton, an associate professor of public policy and economics at the University of Virginia, challenges Scott’s interpretation. He informed Politico that such a plan could cause a significant decline in Obamacare enrollments, resulting in fewer insurance options for those who remain.
“If there were this type of large wholesale shift from subsidies to cash payments, I would expect enrollment to drop significantly, and I would expect insurers to pull out of the markets,” Layton expressed.
Jonathan Gruber, an economist from the Massachusetts Institute of Technology, pointed out that healthier individuals would likely opt out of Obamacare, thereby reducing risk pools and driving up premiums for others.
“As we’ve seen with the ending of subsidies, what happens is a twofold effect on insurance affordability: When subsidies fall, it’s the healthiest to drop insurance—that raises premiums for everyone else,” Gruber noted. “Second of all, among those who are paying those higher premiums, they are getting lower subsidies to pay them with.”
Previously, in his 2020 U.S. Senate campaign, James criticized the Republican “failure to repeal and replace Obamacare” and pledged to work tirelessly to remove it.
Scott’s proposal is among several suggestions intended to address the upcoming expiration of enhanced Obamacare subsidies. These enhancements, which further lowered premiums, were established under the 2021 American Rescue Plan signed by President Joe Biden. They are expected to end on December 31, potentially increasing premiums for 22 million Americans.
While House and Senate Democrats have introduced bills to extend these subsidies by three years, Republicans like James and Scott are in opposition.
In Michigan, nearly half a million residents could witness premium hikes in 2026. State Senator Kevin Hartel warned in an October 22 hearing about the challenges these increased costs would impose on struggling families.
“We’re seeing families that are understanding the impact of this, who are already struggling with increased costs from things like groceries, prescription medicines, and everything they need to pay for on a day-to-day basis,” Hartel stated. “This will just compound those issues and make it harder for them to get by.”
James is one of multiple candidates vying for the Republican nomination for governor in the 2026 elections, with the primary set for August 4.
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