(The Center Square) – The National Taxpayers Union is urging Congress to let the expanded Obamacare premium tax credits, which help subsidize health insurance rates, expire in 2025 as planned.
In a Monday letter to U.S. lawmakers, the NTU highlighted how the temporary expansion of the Premium Tax Credit, intended as a temporary measure during the COVID-19 pandemic, has cost billions of taxpayer dollars more than advertised.
“Taxpayers should not be on the hook for the extended benefits to upper-income households who were never intended to be subsidized under Obamacare,” Thomas Aiello, NTU’s Senior Director of Government Affairs, wrote. “Allowing the PTC expansion to expire is a small but meaningful way to demonstrate seriousness about restoring fiscal discipline.”
The PTC expansion not only reduced the cost of premiums for health insurance purchased via Affordable Care Act marketplaces but also extended eligibility to people with incomes above 400% of the federal poverty level.
Aiello told The Center Square that besides having charged taxpayers at least double the estimated $10 to $15 cost, the PTC expansion further distorted the healthcare marketplace by directly subsidizing Obamacare.
“We need to get the government out of the healthcare marketplace. We think if there’s more of a free market, a market-based system in place, then supply will meet demand,” Aiello said. “But any time you throw government tax credits into the whole thing, it really distorts the market, because people aren’t the ones paying these health care costs if they’re taking these credits. Federal taxpayers are.”
According to Congressional Budget Office estimates, failing to renew the expanded PTC would lead to an increase of 4.2 million people without health insurance by 2034.
But CBO also determined that permanently extending the expanded PTC would swell the federal budget deficit by at least $355 billion and increase direct spending by $275 billion over the 2025-2034 period.
The national debt recently topped $37 trillion.
“There’s no such thing as a temporary program in Washington,” Aiello said. “At the end of the day, they’re always going to find a way to try and extend it, whether it’s good policy or bad.”
Even though no Republicans voted in favor of expanding the PTC, many are wavering on whether to extend the policy given the political ramifications – particularly how it would impact Republicans’ midterm chances – of letting the credits expire.
Aiello argued that there are plenty of ways Republicans can push back against the pressure campaign, which he says is mostly fueled by special interest groups, like insurers, who benefit most from the expansion.
“So at the end of the day, we need to make sure that good policy stands on its own – being able to talk with people that these credits are costly, and they’re riddled with fraud,” Aiello said. “It is a COVID-era program that was only meant to be temporary. And the worst part is, it subsidizes Obamacare. COVID and Obamacare should be, to the Republican base, really something that fires us up.”
