With the expiration of health insurance premium subsidies under the Affordable Care Act (ACA) at the end of last year, Americans are set to see a sharp increase in premiums starting in the new year.
Millions, from low-income to middle-income, will inevitably be affected, and the controversy surrounding this issue is expected to become a major issue in US politics starting in the new year, ahead of the midterm elections in November. This is because the Republican and Democratic parties, rife with conflict, have failed to enact legislation to extend or replace the subsidies, which were originally set to expire on December 31st of last year.
The opposition Democratic Party pushed for a three-year extension of the subsidy payments, but this was blocked by Republican opposition. Republican alternatives, including eliminating the subsidy but expanding tax-advantaged Health Savings Accounts (HSAs) and distributing subsidies directly to low-income individuals rather than insurance companies, also failed to pass Congress due to Democratic opposition. These issues were also a major factor in last year’s federal government shutdown, which lasted 43 days and became the longest in history.
The Hill, a U.S. Congressional news outlet, predicted on the 1st (local time) that a debate would erupt in Congress in the new year, when the subsidy payments expire. This debate is expected to be fierce not only between the Republican and Democratic parties, which are sharply divided over whether to “repeal and replace” the Obamacare subsidy with a new system or “extend” it, but also within each party.
First, the House of Representatives will vote on a bill to extend the subsidy payments for three years, which the opposition party pushed late last year. This was made possible by four centrist Republican House members signing a “discharge petition” against the Democratic bill. This petition requires 218 signatures, a majority of the House, to vote on a specific bill without committee consideration. With these four members turning to the opposition party, a vote can proceed despite opposition from the Republican leadership that controls the House.
The bill is likely to pass in the House, which has 220 Republican seats and 213 Democrats (with two vacant seats). However, The Hill predicted that it would not pass in the Senate (53 Republicans vs. 47 Democrats and Democratic-leaning Independents).
President Donald Trump has also labeled the ACA itself a failed policy, claiming that the law only enriches insurance companies and that subsidies should be provided directly to the public. Ultimately, this will leave countless Americans without access to health insurance, but reaching an agreement in Congress is expected to be a significant hurdle.
Citing health insurance non-profit organizations and experts, The Hill reported that premiums for health insurance plans signed up for through the ACA this year will rise by an average of 26%, and the average annual premium burden for policyholders will increase by 114%, or $1,016, more than doubling from the previous year.
Experts also estimated that between 2.2 million and 7.3 million people will choose not to renew their policies.