At the center of the government shutdown is a disagreement over whether to extend a temporary pandemic-era expansion of the Affordable Care Act’s premium tax credits. These subsidies cover health insurance premiums for the roughly 7 percent of Americans who use the government-run Obamacare insurance marketplace. Sold as a temporary boost during the COVID-19 pandemic, the subsidies are costly, fraud-prone, and primarily pad insurance companies’ profits.While the pandemic plus-up expires at the end of 2025, the originally designed Obamacare subsidy is permanent. The temporary expansion, enacted under the American Rescue Plan Act and later extended by the Inflation Reduction Act, increased the size and made the subsidies more widely available.Here are six reasons Congress should not extend the inflated pandemic insurance subsidies:
- Costs almost half a trillion dollars
- Funds the well-off
- Subsidizes insurance companies, not patients
- Rampant enrollment fraud
- High cost for little patient value
- Temporary emergencies should not justify permanent entitlements
Conclusion
Biden’s pandemic-era Obamacare premium subsidies were sold as temporary relief but have instead produced fraud, phantom enrollees, and subsidies for wealthy taxpayers who don’t need them. The program funnels billions of taxpayer dollars to insurers and middlemen while distorting the individual market and doing little to expand meaningful access to care. Congress can stand up to the insurance industry by letting these temporary COVID-era subsidies expire as scheduled. Or better yet, repeal them entirely. The enhanced subsidies are a costly reminder of how temporary government programs can become billion-dollar permanent entitlements.
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