WASHINGTON (AP) — The government shutdown has reignited debate over a central issue of the past 15 years for both major political parties: the future of health insurance under the Affordable Care Act.
Tax credits for people who buy health insurance through the marketplaces created by the Affordable Care Act, also known as Obamacare, are set to expire at the end of the year.
Democrats say they won’t vote to reopen the government until Republicans negotiate an extension of expanded subsidies. Republicans say they won’t negotiate until Democrats vote to reopen the government. Lawmakers from both parties have been working behind the scenes on possible solutions, hoping that leaders will eventually start talking. However, it is unclear whether both sides could find a compromise.
As Congress considers the issue, a poll from The Associated Press-NORC Center for Public Affairs Research found that about six in 10 Americans are “extremely” or “very” worried that their health care costs could rise next year. These concerns span all age groups and affect people with and without health insurance, the survey found.
A look at the expiring subsidies, the politics of the ACA, and what Congress could do:
Extended Premium Help During the Pandemic
The ACA, passed in 2010, was intended to reduce the number of uninsured people in the country and make coverage more affordable for those who do not have private insurance. The law created state exchanges, some of which are run by individual states, to try to expand the pool of insured people and lower rates.
In 2021, when Democrats controlled Congress and the White House during the COVID-19 pandemic, they expanded premium aid already enshrined in law. The changes included eliminating premiums for some low earners, ensuring higher earners paid no more than 8.5% of their income and expanding eligibility for middle earners.
The expanded subsidies drove enrollment to up-to-date levels and dropped the number of uninsured people to historic lows. This year, a record 24 million people signed up for coverage through the ACA, in gigantic part because billions of dollars in subsidies have made the plans more affordable for many people.
When the tax credits expire, annual out-of-pocket premiums are estimated to rise by 114% — an average of $1,016 — next year, according to an analysis by KFF.
Democrats are pushing to expand subsidies
Democrats extended those tax credits for another three years in 2022, but failed to make them lasting. The loans expire on January 1st and Republicans are now in full control.
Lacking power and seeing a political opportunity, Democrats used some of their only influence and forced a government shutdown on the issue when federal funding ran out on October 1. They say they won’t vote for a House-passed government reopening bill until Republicans give them some assurance that the subsidies will be extended.
Democrats introduced legislation in September to permanently extend the premium tax credits, but have indicated they are open to a shorter period.
“We need serious negotiations,” Senate Democratic leader Chuck Schumer has repeatedly said.
Republicans are trying to roll back the ACA again
Democrats’ health care demands have reignited Republicans’ longstanding grievances over the ACA, which they fought for years and failed to repeal in 2017. Many in the party say that if Congress acts, they want to eliminate the expanded subsidies and overhaul the entire law.
The problem is not the expiring subsidies, but “the cost of health care,” said Republican Senator Rick Scott of Florida on Tuesday.
In a virtual briefing on Tuesday, the libertarian Cato Institute and the conservative Paragon Health Institute branded the subsidies as President Joe Biden’s “COVID credits,” claiming they enabled fraudsters to enroll people in fully subsidized plans without their knowledge.
Others have offered more modest proposals that might persuade some Democrats. Senate Majority Leader John Thune, R-S.D., has said he is open to expanding the subsidies with changes including lower income limits and a halt to automatic enrollment, which may enroll people who don’t need the coverage.
The ACA is in “urgent need of reform,” Thune said.
House Republicans are considering their own ideas for reforming the ACA, including proposals to phase out subsidies for up-to-date enrollees. And they have begun discussing whether to combine health care reforms with a up-to-date government funding bill and submit it to the Senate for consideration when they return to Washington.
“We will probably negotiate some workarounds” to ease the transition back to pre-COVID-19 levels, Maryland Rep. Andy Harris, the chairman of the conservative House Freedom Caucus, said during a virtual town hall meeting Tuesday.
Is a compromise possible?
Several Republicans want to extend the subsidies. Sen. Josh Hawley, R-Mo., said that most people who operate the exchanges created by the ACA “don’t really have any other option and it’s already very, very expensive. So I think there are things we can do to reform the program.”
Hawley said he has had conversations with other senators about what those changes might be, including proposals for income limits that he sees as “very sensible.”
Bipartisan groups of lawmakers have discussed the income limits and other ideas, including requiring people with the lowest incomes to pay very low premiums rather than nothing. Some Republicans have advocated for this change to ensure all participants know they have and need insurance coverage. Other proposals would extend the subsidies for a year or two or phase them out.
It’s unclear whether any of these ideas might find favor on both sides — or whether there is interest from the White House, where President Donald Trump has remained largely uninterested. Despite the public stalemate, however, lawmakers are feeling increasing urgency to find a solution as the Nov. 1 open enrollment deadline approaches.
Democratic Sen. Jeanne Shaheen of New Hampshire has been talking to lawmakers since the shutdown began, trying to find areas of compromise. On Tuesday, she suggested that Congress might also consider extending sign-up deadlines for the ACA, given that Congress has stalled on subsidies.
“These costs will affect all of us, and they will impact our health care system,” she said.
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Associated Press writers Lisa Mascaro and Joey Cappelletti in Washington and Ali Swenson in New York contributed to this report.
