ObamaCare is a train wreck. I wrote a book entitled The ObamaCare Train Wreck in 2014, before the new healthcare law went into effect, and it has certainly lived up to my expectations. It’s now nearly twelve years later and Democrats keep trying to put this train back on the track by increasing government subsidies to offset the rising costs. But throwing good money after bad never made sense and it certainly doesn’t now.
The Biden administration increased ObamaCare subsidies and increased eligibility limits during the Covid pandemic as a response to the rising costs. They flow to more than 20 million people. Without those subsidies, many enrollees will see their monthly payments jump and could decide to drop coverage altogether.
But those temporary measures are due to expire the end of December. The Congressional Budget Office has estimated that extending the enhanced ACA subsidies permanently would cost $350 billion over the next 10 years. Democrats want to make those increased subsidies permanent and that’s one reason they shut down the government for 42 days. But now that the shutdown is over, this issue is still on the table until the end of the year.
The White House is responding with new proposals to address the issue. Natalie Andrews, Lindsay Wise, and Olivia Beavers write in The Wall Street Journal that the subject is under discussion, but President Trump has yet to weigh in on his opinion.
Proposals being considered include a two-year extension of the ACA subsidies as an enticement to get Democrats to get on board. As part of the new plan, the White House has discussed imposing income caps for Affordable Care Act enrollees to qualify for the enhanced subsidies, as well as measures to crack down on healthcare fraud, some of the people said. Republicans also have discussed moving the subsidy money into newly created health savings accounts and barring taxpayer funds from going toward plans that cover abortion and transgender care, the people said.
Health Savings Accounts (HSA) allow taxpayers to use money deposited into accounts by employers that can be used for healthcare expenses. HSA accounts are tax free and give families control over their healthcare expenditures. These accounts were first created by John C. Goodman, healthcare economist, in 2003 but they were phased out by the Biden administration. Re-establishing these accounts is a great idea.
Republicans are coalescing around taking the money spent to extend Obamacare subsidies and putting it in a health savings account, a proposal Trump supports. “Rather than giving money to insurance companies, we want to start giving the money to patients,” said Sen. Roger Marshall (R., Kan.), who has discussed plans with the White House and senators.
Marshall said that Republicans also want to eliminate fraud in Obamacare, by eliminating “zero-premium” subsidies now offered under some plans. Republicans say such subsidies lead to people being signed up for plans that they don’t know about—while insurance companies receive taxpayer funds.
Should a bipartisan measure fail, Republicans are considering pushing their healthcare plan without Democrats by using a budget process called reconciliation. The approach requires a simple majority vote in the Senate, where 60 votes are usually required. GOP lawmakers used reconciliation earlier this year to pass Trump’s “big, beautiful” tax bill, but the process takes months.
A vote on extending the healthcare subsidies is expected by mid-December—part of a deal struck between Senate Majority Leader John Thune (R., S.D.) and a group of centrist Democrats to end the shutdown earlier this month. It is unclear if the House will take up the measure.
Republicans need to put forward their own plan to improve healthcare insurance. It is clear now more than ever that ObamaCare is not the long term solution.
