Review | Democrats are facing a time bomb on health care spending

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You can call it a disastrous “October surprise” for Democrats in this year’s crucial midterm campaign, except that it wouldn’t be a surprise at all, and one that can be completely avoided.

The government’s inability to reach a sort of agreement on a smaller version of President Biden’s Build Back Better legislation so far creates a real opportunity for millions of middle-class Americans to raise their health insurance costs by hundreds of dollars. next month. And if that happens, they’ll hear the news a few weeks before Election Day.

Therefore, the temporary grants for people who buy coverage through the Affordable Care Act – which is provided in last year’s massive covid-19 relief package – are expected to expire at the end of 2022. The suspended BBB legislation would provide an extension. subsidies.

Exchanges were created for people who do not receive health insurance through their jobs or through government programs such as Medicare and Medicaid. Advanced retirees, concert workers and others who are self-employed, as well as people employed in small businesses that do not offer group coverage. In the original version, the 2010 health care law only provided premium benefits to families earning between 100 and 400 percent of their poverty rate.

In 2021, the American Rescue Plan Act made temporary premium assistance available to an additional 3.7 million people, mostly with incomes between four and six times the poverty level, according to the Kaiser Family Foundation. This new aid for those who were previously eligible for income was too high to set a record US $ 14.5 million for Obamacare to achieve health coverage through the markets this year, surpassing the previous peak by almost $ 2 million.

How much have people received from these grants? Again, some Kaiser data: Enough is enough to cover more than half of the $ 11,000 a year awards, earning more than $ 51,000 for a 60-year-old for a relatively low-cost “silver” plan, or more than four times the poverty level. Without help, a couple over the age of 50 earning $ 75,000 would raise their monthly premium by $ 700 this year, and the total cost of their plan would be more than $ 1,200 a month.

So losing these benefits would be a great success for people who earn a living but are far from wealthy. And that’s not all they’ll get when they sign up for the annual Obamacare exchange. As hospitals pay significantly higher labor and other costs, insurance premiums are expected to double in the coming year.

This type of sticker shock will force many people to buy plans with lower coverage or larger deductions and other out-of-pocket costs. You may be able to pay in full from the health insurance market.

All of this should add a bit of urgency to the seemingly dead White House and Capitol Hill negotiations between the White House and Democrats to find out if any part of the U.S. president’s original $ 1 trillion proposal to transform the U.S. economy can still be saved. (The Congressional Budget Office estimates that extending temporary subsidies to people who buy health insurance would cost about $ 210 billion over the next decade).

Time is running out, and Democrats may not have a second chance if they rule out this option. Republicans, if they had to take one or both chambers after this fall’s election, are unlikely to strengthen the ACA, and they hate that. “Members of Congress, especially Democrats, are not acting like this is a crisis. They can fix this,” Chris Jennings, who was the chief health adviser to the Clinton and Obama administrations, told me.

A simple majority would be required to extend the grants in accordance with the rules for the consolidation of the Senate budget. Senator Joe Manchin III’s frustratingly opaque senator (DW.Va.) remains the key vote, but there are obstacles to believing he wouldn’t. He was in favor of the Affordable Care Act and was generally open to measures to reduce the cost of health care, including allowing Medicare to negotiate the prices of prescription drugs, another provision on the Biden agenda and something Democrats have promised for many years. . .

Democrats, despite their narrow majority in the House and Senate, can still achieve some things at the finish line. One of them should be to avoid a completely predictable outburst of health care costs.

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