Caroline Brehman/CQ Roll Call via AP Images
Demonstrating outside the Supreme Court in support of the Affordable Care Act, November 2020
Watching congressional Democrats these days feels like a painful, slow-motion car wreck. They are sleepwalking into a health care disaster that’s entirely of their own making. With little debate or media focus, Democrats are on the verge of dooming millions of Americans to huge new health care bills, which will in turn serve to ruin any hope Democrats have of winning the midterms. And that will effectively destroy any chance of real health care reform for at least another decade.
In 2021, as part of the American Rescue Plan, Democrats improved the Affordable Care Act subsidies for the insurance exchanges. For the first time, this created a situation where all American citizens qualified to get health insurance at a legally defined “affordable” premium. Despite its flaws, it was a big ideological statement, and a serious improvement for the 14 million with exchange coverage. While the bill only improved subsidies for two years, almost everyone assumed Democrats would eventually make the change permanent, since it had support across the entire Senate caucus, and allowing enhanced subsidies to expire would be politically idiotic.
It turns out, though, that one should never underestimate the collective incompetence of the Democratic Party. Making the enhanced subsidies permanent was supposed to be part of the Build Back Better plan, but Sen. Joe Manchin (D-WV) killed that. Now, Manchin is talking about a new, much smaller reconciliation package, which notably does not include these subsidies or any other social-program improvements. All of the spending in Manchin’s proposed package would be on energy programs.
According to the Department of Health and Human Services, some 3.4 million Americans will become uninsured if these subsidies aren’t extended. The health care foundation KFF determined that premiums would more than double for many. Potentially all subscribers on the insurance exchanges will be affected, though we don’t know precisely how.
Unlike the expiration of the expanded Child Tax Credit, which was a relatively even hit for every parent a year before the election, how much a person will be impacted varies greatly depending on income, age, and location. For some, the change will be modest, but others will receive news effectively of financial ruin right before they vote.
While current enhanced ACA subsidies don’t expire until the end of December, open enrollment to sign up for insurance in 2023 starts on November 1st. This means customers will receive letters about their 2023 premiums, and the news will start covering stories about premium increases, in October, the same time that mail-in ballots will reach voters.
Currently, inflation ranks as the top concern among Americans, and Democrats have set it up so that millions will be told they face a massive increase in their cost of living right before the election.
Beyond broadly hurting 14 million people, the end of these subsidies will create thousands of uniquely horrific stories of financial devastation.
For a sense of how devastating inaction on extending the subsidies will be, imagine a 60-year-old woman in Huntington, West Virginia, who lost her job due to the pandemic and started a small business making $56,000 a year. The enhanced ACA subsidies mean that this year, the cheapest health insurance plan is costing her only $93 a month. But next year without the subsidies, she will be paying over $1,500 a month for the same coverage with a very high deductible.
Since almost no one thought Democrats would fail to extend the subsidies, many people made employment and financial plans accordingly. Individuals have quit jobs, moved, dropped previous insurance, and made other plans that rely on the new subsidies, only to have the rug potentially pulled out from under them in October.
Beyond broadly hurting 14 million people, the end of these subsidies will create thousands of uniquely horrific stories of financial devastation. Due to the weird interplay of the ACA’s insurance rules around age and the design of the subsidies, the most jaw-dropping price hikes will be among older middle-class Americans. Many of them will likely feel betrayed that Democrats made them financially worse off than before. This is a group that tends to turn out disproportionately in midterm elections. All of these stories will be news fodder to highlight in the weeks before the midterms.
Congressional Republicans have steadfastly opposed any improvement to the ACA since its inception. Republicans have even refused to allow the normal minor clerical corrections that follow almost every major piece of legislation, so they could try to exploit these technical issues to ruin the ACA in multiple lawsuits. If Republicans win another massive midterm victory because Democrats once again mishandled health care, it is extremely unlikely they are going to want to turn around and help Democrats fix the problem.
Furthermore, if Republicans win in 2022, Democrats are unlikely to win another trifecta for at least another decade, if not longer. In addition, if millions of people feel they have been burned by making the mistake of choosing to use the Democrats’ health care program, public opinion of the program could take a big hit. The ACA’s favorable rating has improved by five points since Democrats enhanced the subsidies, but remains at 58 percent, owing in part to implacable opposition from the right wing. Those numbers will likely rocket downward if the subsidy enhancements expire.
On a separate track, previous pandemic relief measures included a “continuous coverage” option that gave states higher shares of Medicaid funding. Those changes end if the administration ends the public-health emergency created by COVID-19. The emergency could end as soon as this summer, according to published reports, which would instantly allow states to cull their Medicaid rolls and throw 12 million people, by one estimate, off public health insurance. Build Back Better would have stepped down the increased payments to states slowly, kept a small portion of them in place, and made it harder for states to disenroll lots of beneficiaries in one shot. But with Build Back Better dead, that’s gone too, imperiling millions of Medicaid patients, again just before the midterms.
If Democrats miss the opportunity to permanently fix Medicaid and the ACA subsidies, it might not be possible to ever rebuild trust in the ACA or in the Democrats’ brand as the party of health care. It will be very hard to sell slowly building on the ACA if Democrats prove they can’t be trusted to ever do that.
