A recent analysis of federal health care costs by the Parliamentary Budget Department has allowed the temporary expansion of Obamacare subsidies to expire in December without reducing the number of people covered by personal health insurance. , Suggesting taxpayers can save billions of dollars.
Nonetheless, Senate Democrats are trying to expand Obamacare’s expansion and bail out some other provisions of President Joe Biden’s star-crossed buildback better spending bill.
Senator Joe Manchin, who is helping the Democrats pass the slimmed-down package, imposes government price controls on prescription drugs and extends the expanded Obamacare premium subsidy for another two years. It is reported that he agreed to do so.
Congress temporarily expanded these subsidies under the US Rescue Planning Act, a $ 1.9 trillion bill that contributed to record inflation. Lawmakers argued that the pandemic needed a more generous Obamacare subsidy. These grants are expected to expire in December this year.
The latest Parliamentary Budget Office analysis of Obamacare’s costs and the impact of coverage suggests that extending subsidies beyond December will cost taxpayers a lot. Expiring a subsidy not only saves money, but does not reduce the number of Americans who have personal health insurance in 2023.
The CBO estimates that 17 million Americans will have personal health insurance policies in 2022 with enhanced Obamacare subsidies. The remaining 3 million bought insurance outside the exchange.
For the calendar year 2023, the CBO estimates that the same number of 17 million people as this year will be individually indemnified, even if subsidies are not expanded.
According to the agency, the government’s subsidy will be reduced by 2 million, but the number of people who buy insurance without taxpayer subsidies will increase by 2 million, and the number of individual insurance subscribers will remain at 17 million.
Expiring the subsidy in December will save the federal government a significant amount of money. The CBO expects these subsidies to cost the federal government $ 78 billion this year. In the next fiscal year when the enhanced subsidies expire, that amount will be reduced to $ 59 billion, a reduction of approximately $ 19 billion.
Some argue that premiums will rise if Congress allows the expanded subsidies to expire. That is categorically wrong.
The insurance company sets the premium for Obamacare insurance. The government then decides whether those who enroll in exchange-based policies are eligible for subsidies.
For example, in 2022, a family of four with an income of $ 83,250 will pay a monthly premium of just under $ 400. The government provides insurance companies with over $ 1,000 per month. The insurance company receives a total premium of $ 1,400.
Without the subsidy expansion, the family would pay $ 685 a month and the taxpayer would kick at $ 715, but the insurance company would put the same $ 1,400 premium in their pockets.
Increasing the subsidy does not reduce the insurance premium. Rather, it means that insurers receive less money from customers who benefit from insurance and more money from taxpayers who do not.
It may seem counterintuitive that the CBO expects that returning subsidies to pre-pandemic levels in 2023 will not reduce the number of personal insurance coverage. .. This is because many Americans mistakenly assume that most uninsured people cannot afford compensation and are not eligible for government support.
it’s not. The CBO previously estimated that three-quarters of uninsured people in 2019 could take advantage of employer-sponsored insurance and government subsidies, or earn the highest income in the country.
Of the estimated 30 million uninsured, 5.5 million (19%) were eligible for the Obamacare subsidy. 5.1 million (17%) were covered by Medicaid or the Children’s Health Insurance Program. 9.4 million (31%) had employer-provided insurance. And 2.6 million (9%) were among the top two income quintiles, and as a result, they were not good candidates for government distribution.
As a result, more than 7 million uninsured people are not eligible for subsidies and lack the resources to buy insurance without subsidies. Of these, 4 million were disqualified from public support because they were not legally present in the United States.
The remaining 3.2 million were low-income people living in states that did not expand the Medicaid. Obamacare has banned federal aid to the group.
Therefore, of the estimated 269 million legitimate U.S. residents under the age of 65 in 2019, uninsured and indemnified, federal subsidies or employer-sponsored insurance. Was unavailable to only 3.2 million people.
Increasing the increase in pandemic-related Obamacare subsidies does not help 3.2 million Americans. They remain exempt from premium subsidies.
Instead, Congressional extensions will send billions of dollars more taxpayer money to insurance companies, primarily on behalf of those who already have health insurance.
It was a bad idea to expand the Obamacare premium subsidy for a pandemic. It’s even worse to double these expansions as inflation rampant.
This work originally appeared in The Daily Signal
