Taking Hostages and Threatening Their Healthcare?

Information on what happens if the Senate caves.

A post from xpostfactoid (one of my go-to guys for information). Before his words is an example of the difference in cost for healthcare plans

Before and after costs as taken out of the comments section:

Silver:

Was: $607 per month ($7,281 per year) in premiums (which equals 8.5% of your household income)

Will be: $3,690 per month ($44,284 per year) in premiums (which equals 51.7% of your household income)

Bronze:

Was: $0 per month ($0 per year) in premiums (which equals 0% of your household income)

Will be: $2,797 per month ($33,559 per year) in premiums (which equals 39.18% of your household income).

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“Who’s that good for, besides 20 million-plus prospective marketplace enrollees?

“Political logic suggests a short-term extension of enhanced Obamacare subsidies”

xpostfactoid

Andrew Sprung

Back in July, a memo by Trump pollster Fabrizio Ward famously forecast that refusing to extend the enhanced ACA premium subsidies established by the American Rescue Plan Act, currently funded only through 2025, would cost Republicans the House of Representatives in 2026. More than 80% of the general public supported extended the enhanced subsidies, Ward claimed. Failing to extend them would increase a generic Republican’s then-current polling deficit among motivated voters in the midterms from -8% to -15%. Extending them would swing the generic ballot to +6% among motivated voters.

Underlying that calculation are the huge premium increases that will hit the 22 million current ACA marketplace enrollees (or their 2026 prospective replacements) if the ARPA enhanced subsidies expire. According to an oft-cited KFF estimate, ARPA subsidy expiration would lead to an average increase of 75%* in premiums paid by marketplace enrollees. An average that rolls together reduced subsidies for those eligible, complete loss of subsidies for enrollees with income above the pre-ARPA income cap on subsidy eligibility, and average base (unsubsidized) premium increases a bit below or a bit above 20% (the higher estimate, by Charles Gaba, is weighted according to plans’ enrollment).

This case seems incontrovertible by the laws of political logic that have governed U.S. politics to date. If Republicans don’t gerrymander and cheat their way out of House losses, they will pay the price for making health insurance radically more expensive for more than 20 million prospective marketplace enrollees, who are heavily concentrated in red states. Perhaps Democratically-leaning voters’ disillusionment with elected Democrats, or an ever-more fragmented and fact-free information environment, or the enduring passion of Trump’s base, will negate the old political logic. But letting the subsidies expire would seem to entail huge political risk for Republicans in Congress.

Democrats have somewhat skewed this logic by staking their shutdown threats on extension of the subsidies, along with (theoretically) rollback of the savage Medicaid cuts in the Republican megabill passed in July.

(Emphasis) I personally agree with Brian Beutler that any shutdown threat should be focused on protecting and restoring Congress’s Constitutional power. This over spending against Trump administration rescissions and impoundments – -that is, to protect the country from an economic dictatorship. But Democratic leadership has concluded that their enduring polling advantage on healthcare, the unpopularity of Republican cuts to healthcare spending, and the timing of the pending marketplace subsidy reductions give them powerful leverage.

To me, Occam’s Razor, as it would function under ordinary political logic, suggests that Republicans will be inexorably drawn to laying an obvious trap for Democrats: Propose to extend the enhanced subsidies for one or two years, perhaps with the some conservative tweaks, like a $5 minimum monthly premium (which would itself significantly cut enrollment), or a 600% FPL cap on subsidy eligibility (which might cut out subsidies for 1-2 million).

Democrats say they won’t accept a short-term extension, but really? They’re going to trigger a cost increase north of 75%* on average for 22 million current enrollees because Republicans aren’t doing it their way? It will be easy for Republicans to point out that Democrats themselves failed to make the enhanced subsidies permanent, as they were dependent on votes from Senators Manchin, Sinema, and perhaps other Democrats chary of increasing the deficit by some $350 billion over ten years.

It’s often pointed out that the worst effects of Republicans’ Medicaid cuts won’t be felt until 2027 and beyond — though the pending cuts to provider taxes that are a key means of funding Medicaid in many states are already triggering cutbacks. A one-year extension of the ARPA subsidy enhancements would dodge the political blow in 2026. Charles Gaba points out to me that a two-year extension might be (politically) worse for Democrats, since it would remove the threat of huge spikes in the immediate runup to the 2026 election next fall. But the same threat would then be looming in advance of the presidential election.

Gaming out the kick-the-can logic suggests another rooted U.S. political tradition: perpetual short-term fixes to head off a political hit to either party. That’s how CHIP funding has worked, and it’s how adjustments to payments of doctors by Medicare worked from for almost 20 years before a global long-term recalibration happened in 2015. From a policy standpoint, then, a short-term extension might be acceptable to Democrats, since every extension increases the odds against complete rollback to the pre-ARPA subsidy schedule.

Of course, Republicans in the Trump era do manage to abrogate hoary rules of politics — witness their passage of $1 trillion in cuts to federal health programs (or $1.5 trillion if you assume that mandatory cuts to Medicare triggered by the megabill’s deficit increases will actually happen). Right-wing ideology tends to control the caucus, conventional political logic be damned. The right wing is ideologically armed by Brian Blase’s wildly exaggerated claims of marketplace enrollment fraud (broker-induced enrollment fraud did become a serious problem in the Biden years. Shutting it down does not require any change in subsidies, or the thicket of administrative barriers to enrollment enacted by Trump’s CMS ). Thus Republicans may not act in their own interest by allowing a one- or two-year extension of the ARPA subsidies.* But don’t be surprised if they do — and if Democrats are wrong-footed when it happens.

P.S. Republicans could also let Democrats have their shutdown, while asserting they’ll fix the subsidies separately. That could work out for them — if they do it.

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*As I pointed out recently, the 75% estimate is low, as it’s based on a 2024 estimate of the percentage of income that enrollees in each income bracket would pay for a benchmark silver plan. That percentage is adjusted every year, increasing with inflation for health insurance premiums overall, and Trump’s CMS adopted a new method of calculating inflation that substantially increased the applicable percentages. KFF has since adjusted its calculator showing the pre- and post-ARPA difference at each income/age level to incorporate the actual applicable percentages.