US President Donald Trump signed an executive order on Thursday to establish a federal health care overhaul that includes $1 trillion in tax credits for states to expand their Medicaid programs, as well as tax credits to cover high-cost services like nursing home care.
The measure, called the Affordable Care Act (ACA), is the largest overhaul of the nation’s healthcare system in 50 years.
The measure would also allow states to impose a 10% surtax on health insurance premiums, which is the same as a tax on income above $250,000.
The plan, which Trump said he would sign soon, is aimed at cutting down on the number of uninsured Americans by helping states expand Medicaid and to expand coverage for people with pre-existing conditions, among other things.
The administration said that in the first two years, states will be able to spend up to $6.5 trillion on Medicaid, with states getting a tax credit to help cover the cost.
The healthcare system has become a point of contention in the US election between Trump and Democratic challenger Hillary Clinton.
Trump has repeatedly pledged to repeal the ACA, which he has called a failure, while Clinton has promised to expand it.
The health care bill has drawn fierce opposition from Republicans, including Trump, who say it is not comprehensive enough and that the tax credits would help more Americans, rather than the wealthy.
Trump’s administration has argued that the subsidies are intended to encourage more people to join the healthcare system, not to replace it.
But Trump has defended his executive order, saying it was needed to help expand coverage, but that it is a good starting point.
“This is a major step forward in creating a new system of health care that is fair, affordable and provides health care for every American,” Trump said.
“And it’s a step forward, not only in creating health care coverage, it’s also in expanding access to care for those who are sick and need care, which has been the most critical component of our healthcare system for the past eight years.”
Trump said that the bill will also create a national hospital insurance pool and allow states that do not have the ability to set their own insurance markets to pool money together to help pay for the cost of caring for those with pre “unwanted” conditions.
“There will be no more denying the need to provide health care services to those in need.
We will not deny the American people health care,” he said.