With the battle over extending pandemic-era Affordable Care Act subsidies raging in Congress, organizations across the political spectrum are highlighting the political pros and costly cons of making a temporary policy permanent.
The health care conflict is the cause of the ongoing government shutdown, which has lasted since Oct.1 after Senate Democrats first voted down Republicans’ seven-week funding stopgap.
The House-passed bill has failed in the upper chamber 10 times now, with Democrats refusing to fold unless Republican leaders agree to permanently extend the enhanced Obamacare Premium Tax Credits.
But the Cato Institute, a Libertarian think tank, highlights how cementing the expanded PTC would cost $488 billion over the next 10 years alone.
It also points out that health insurers profit the most from the expansion, since the subsidy is paid directly to insurance companies – who have logged massive profits even as premiums continue to rise – instead of Americans.
The Economic Policy Innovation Center, a conservative think tank, opposes a permanent extension as well, particularly since the temporary expansion removed the eligibility income cap, allowing people earning more than $500,000 annually to qualify for the credit.
“The Biden COVID Credits do not actually reduce premiums, they just shift added costs to the taxpayer,” EPIC’s Director of Budget Policy Matthew Dickerson wrote.
Other organizations argue that allowing the subsidies to sunset as scheduled will have devastating impacts on millions of Americans.
Researchers at the left-leaning Urban Institute recently estimated that 7.3 million people currently enrolled on the ACA marketplaces would choose not to enroll in 2026 if the enhanced PTC expires and Obamacare subsidies return to pre-pandemic levels.
Of that number, 4.8 million could become uninsured, researchers predicted. The smaller pool, coupled with the loss of the enhanced subsidies, would increase premiums by 114%, amounting to hundreds or even thousands of dollars more per month.
The Urban Institute also estimates that failing to renew the credits could result in up to 340,000 jobs lost across the country, assuming that businesses and health care providers reduce their workforces due to the loss of income.
That income loss would cause state and local tax revenues to decrease by $2.5 billion, researchers found.
“Unless Congress acts quickly to extend the enhanced marketplace premium tax credits, there will be serious consequences,” they wrote.
Congressional Democrats demand a guarantee that Republicans will help pass a bill to extend the enhanced Obamacare PTC before they vote to reopen the government. The shutdown will last at least 20 days as lawmakers headed home for the weekend, inching closer to the record of 35 days.
