Why Congress Shouldn’t Increase Obamacare Spending |
By Doug Badger, The Daily Signal |
July 18, 2022 |
Senate Democrats want to salvage some of President Joe Biden’s Build Back Better spending bill, and extending Obamacare health insurance subsidies is a top priority
Sen. Joe Manchin, D-W.Va., whose support is crucial to Democrats’ passing the legislative package, reportedly has agreed to put government price controls on prescription medicines and to extend the expanded Obamacare premium subsidies for two more years.
But a recent analysis of federal health spending by the Congressional Budget Office (CBO) suggests that taxpayers would save billions of dollars and that the number of people with health insurance would remain the same if the subsidies were allowed to expire in December, as they are on track to do.
Congress temporarily expanded those subsidies in the American Rescue Plan Act, a $1.9 trillion bill that has contributed to record inflation. Lawmakers argued that the pandemic required more generous Obamacare subsidies.
The latest CBO analysis of Obamacare cost and coverage effects suggests that extending the subsidies beyond December would cost taxpayers plenty. CBO expects those subsidies to cost the federal government $78 billion this fiscal year. Next fiscal year, when enhanced subsidies lapse, that amount would drop to $59 billion, about $19 billion less.
Letting the subsidies expire not only would save money but would NOT result in fewer Americans having individual health insurance coverage in 2023. For calendar year 2023, CBO estimates that 17 million—the same number as this year—will have individual coverage, even without the expanded subsidies.
An extension of the subsidies by Congress would send billions more in taxpayer money to insurance companies, largely on behalf of those who already have health insurance.
Expanding the Obamacare premium subsidies because of the pandemic was a bad idea. Doubling down on those expansions amid rampant inflation is an even worse one.