3 million to lose Obamacare in 2023 if Democrats don’t extend subsidies | U.S. & World
Over 3 million Americans will lose health coverage if Congress allows enhanced subsidies for insurance on the Obamacare exchanges to expire later this year, a key item of unfinished business for Democrats at risk of losing their majorities in November.
Democrats have sought, but so far failed, to extend temporary tax credits that were implemented in President Joe Biden’s pandemic relief plan for premiums on health plans purchased on the Obamacare exchanges. If the additional subsidies expire, 3.1 million Americans will no longer have insurance, according to a new report from the Urban Institute.
Insurance premiums will also increase for marketplace policyholders. The American Rescue Plan, the landmark rescue legislation signed into law soon after President Joe Biden took office, extended Obamacare plan subsidies for people at all income levels and increased the amount of financial assistance for people at lower incomes who were already eligible under Obamacare.
Still, the subsidies were only meant to last for two years. Congress was on track to extend them beyond their 2022 expiration through the Build Back Better bill, Biden’s trademark legislative agenda. The bill was twice defeated, due in large part to objection from West Virginia centrist Joe Manchin, who has been a thorn in the side of the progressive wing of the Democratic Party. Manchin cited misgivings about raising inflation beyond its 40-year high.
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“In addition to experiencing coverage losses, people who already had nongroup coverage before the ARP will spend hundreds of dollars more per person on health insurance premiums each year if the enhanced [Premium Tax Credits] are not extended,” the authors of the report wrote.
Extending the tax credits without simultaneously increasing revenue would increase the federal deficit by about $25.3 billion in 2023. Over 10 years, the increase would balloon to $305 billion. The now-scrapped House version of the Build Back Better legislation would have raised about $1 trillion in federal revenue from 2022 to 2031 revenue by imposing a tax surcharge on the ultra-wealthy, levying steeper taxes on major corporations, and improving enforcement of the current tax laws to close the annual gap between taxes owed and taxes paid.
The premium cost reductions established in 2021’s American Rescue Plan caused enrollment to rise to a record level. The Centers for Medicare and Medicaid Services announced in January that 14.5 million Americans signed up for or were automatically reenrolled in 2022 individual market health insurance coverage through the marketplaces.
The total number of enrolled during the most recent open enrollment period totals marked a 21% increase over last year and the highest volume since Obamacare was signed into law 12 years ago. It is a point of pride for Biden that nearly 6 million of the total enrollees are customers purchasing insurance on the exchanges for the first time under his watch.
Biden has been calling on Congress to make the subsidies permanent despite the demise of Build Back Better. He said during his State of the Union address earlier this year that “the American Rescue Plan is helping millions of families on Affordable Care Act plans save $2,400 a year on their healthcare premiums. Let’s close the coverage gap and make those savings permanent.”
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Vulnerable Democrats in Congress could face a reckoning in November’s midterm elections over their stalled healthcare agenda. Democrats will likely seek to extend them further before November rolls around, according to Matt Buettgens, a co-author of the Urban Institute report. A legislative win would help buoy the majority party plagued with criticism over the sky-high level of inflation.
“There is evidence that there will be attempts to renew it as a stand-alone thing,” Buettgens said. “The Build Back Better Act included additional spending that also includes other provisions that raised the revenue that weren’t necessarily directly related to the new spending. So the bill would have to be paired with something that increases revenue.”
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