Photo by MIKE STOLL on Unsplash
After months of media fearmongering, some Republican members of Congress are looking to cave on Obamacare expansion by extending COVID-era enhanced ACA subsidies. Representative Jen Kiggans (R-Va.) and Sens. Bernie Moreno (R-Ohio), Susan Collins (R-Maine), and Roger Marshall (R-Kan.), among others, have introduced extension plans.
All members of Congress should reject these plans. If these subsidies are extended again, they will never go away.
In the American Rescue Plan (ARP), President Biden and congressional Democrats expanded Obamacare subsidies by increasing benefits for households at every income level and expanding them to households earning more than 400 percent of the federal poverty level (FPL). These expanded subsidies were then extended through 2025 in the Inflation Reduction Act. The expanded version of the premium tax credit (PTC) – the enhanced premium tax credit – expires at the end of the year, not the PTC established by the Affordable Care Act (ACA).
Extension is horrendous policy. Extending the expanded Obamacare subsidies would put our country further in debt by nearly $450 billion over 10 years. Extension would be a boon to insurance companies, whether that money goes directly to them or is funneled through a government-run account under a recipient’s name. Extension would encourage insurance companies to keep raising their premium costs, exacerbating the problem. Extension would further encourage rampant fraud – just last week we discovered massive improper use of SSNs to receive Obamacare subsidies, 58,000 dead people receiving subsidies, and the fact that every fake identity created by GAO received subsidized ACA coverage.
The only reason we’re having this debate is because Obamacare failed to deliver on all its promises – people are missing the forest for the trees. President Obama and congressional Democrats made several promises regarding the ACA: that it would reduce the typical family’s premium by up to $2,500 a year, that it would increase competitiveness in the insurance market, that it would reduce the deficit, that it would boost growth and jobs, and, most famous, that if you liked your plan, you could keep it.
Obamacare delivered the exact opposite of these promises to the American people.
Remind me, why are we even talking about bailing out Obamacare? The aftermath of Obamacare is a crime scene. No Republican should leave their fingerprints behind.
Still, some Republican members are looking for ways to “compromise” with Democrats. Rep. Jen Kiggans (R-Va.) teamed up with Democrat Rep. Josh Gottheimer (N.J.) to propose a two-year extension, notably without any Hyde protections. This plan graciously places the maximum salary for receiving handouts at 1000%. So, for a family of four, the household can bring in $321,500 a year and still receive taxpayer funds! Quite the compromise. While their plan includes “options” for more substantial reforms, none rise to a level that would excuse expanding Obamacare.
Sens. Bernie Moreno (R-Ohio) and Susan Collins (R-Maine) pitched a two-year enhanced Obamacare subsidy extension plan, also without Hyde protections. Under this plan, recipients making up to $200,000 would still receive taxpayer dollars with a minimum contribution of $25 a month. Outside of limiting who can receive these subsidies at the margins, the plan contains no conservative reforms to prevent rapidly rising costs. Instead, it does the opposite. Insurance companies will be bailed out and enabled.
Today, Sen. Roger Marshall (R-Kan.) proposed “The Marshall Plan” which, effectively, expands the enhanced subsidies for five years. In the first year, nothing would change (including having no Hyde protections). In the following years, the same funds would be transferred to a government-run “healthcare affordability account.” Over 5 years, the amount deposited would decrease by a meager 20%. Under this plan, the income cap would be 700% FPL, meaning that families of 4 bringing in $225,050 could receive subsidies from American taxpayers.
To be clear, The Marshall Plan includes some positive reforms. However, while we should absolutely pass price transparency reforms, ACA fraud prevention, and implement ID verification before enrolling in an ACA plan, we can do all these things without expanding Obamacare.
All plans mentioned, and other “compromise” plans I neglected to mention, expand Obamacare while including minimal conservative ideas that address the root of healthcare unaffordability. They must be rejected.
Bailing out the failures of Obamacare, at any level, will exacerbate them. While these proposed measures are technically better than if Congress were to pass a clean extension, this is a false choice. If we let the law carry on as is, these enhanced subsidies will expire. Just as Democrats designed them to.
Thus, the Republicans who vote to expand Obamacare will be, in part, responsible for its future, inevitable failures. Especially because any extension of these enhanced subsidies will drive health care costs up in the future.
A CBO report confirmed that premiums for exchange plans, under the enhanced credits, are rising more quickly than originally anticipated. When the government subsidizes the cost of anything, sellers raise their prices. The government will pay for it, after all. While some Americans may be concerned about premiums going up in the short term, removing the incentive for insurers to continue raising their prices will save patients money in the long run.
Expanding Obamacare is not a “political win” for Republicans. It is a betrayal to their moderate and conservative base alike. At the very least, Democrats will never give a Republican who caves credit for doing so – it will always be framed as a win for the Left.
Longtime GOP voters, however, would have every reason to lose faith in a member who betrays something as foundational as not taking steps toward a socialist healthcare system.
For eight years, Republicans ran (hardcore) on repealing Obamacare. During that time, the party held historically high majorities.
No Republican in Congress voted for either Obamacare or the expanded Obamacare subsidies. Our conservative base is still solidly opposed to socializing medicine. Earlier this year, 35 prominent free market groups and advocates released a coalition letter urging Congress to let the expanded credits expire. Further, ATR has a growing list of notable conservatives and members of Congress who stand united against extending these supersized, COVID-era Obamacare handouts.
Instead of folding on the issue, conservatives must prioritize, once again, making the anti-Obamacare argument to voters. It has been a long time since the failures of the ACA were illuminated. Now that they are front and center, voters deserve to be told the truth.
The scope of the problem at hand has been recklessly exaggerated. So, what exactly are some Republicans willing to betray their conservative sensibilities over? Well, not much.
According to insurers themselves in preliminary 2026 benchmark rate filings, only 4 percent of the 20 percent average premium increase next year is attributable to the expiration of expanded Obamacare subsidies.
About 24 million people are enrolled in the Obamacare marketplace. Of those, roughly 21.8 million people receive PTCs. Thus, only around 6 percent of the U.S. population may find themselves directly affected by the expiration of these subsidies.
The PTC will still be intact for those making under 400 percent of the FPL: individuals making under $62,600 annually ($5,216 a month) or, for example, a household of four making under $128,600 annually ($10,716 a month). Notably, the standards for enrollment were quite generous to begin with.
In the words of ATR President Grover Norquist, “Voters didn’t give Republicans full control of Congress and the White House to expand Obamacare.” Instead, conservatives should focus their efforts on reforms that make healthcare more affordable, not less: expanding health savings accounts, tax parity for health sharing ministries, price transparency, codifying Individual Coverage Health Reimbursement Arrangements (ICHRAs), a surplus pension healthcare fix, buttressing Association Health Plans, and many more.
