Worries about coming ObamaCare premium spikes intensify

Democrats are growing increasingly concerned that a spike in ObamaCare premiums could hit this fall right before the midterm elections.  

The party is already facing major headwinds from inflation and President Biden’s lagging approval ratings, and a health care premium spike would add a major blow. 

The American Rescue Plan signed by President Biden last year temporarily increased financial assistance under ObamaCare, but that increase is set to expire at the end of this year, causing an increase in premiums for enrollees in the health law unless Congress acts.  

Notices about the premium increases would be sent out shortly before the midterm elections, adding political pain for Democrats in addition to the higher premiums for consumers.  

“Right before the election, people would get notices of big premium increases, and that will certainly not reflect well on Democrats,” said Larry Levitt, a health policy expert at the Kaiser Family Foundation. 

Vulnerable Democratic lawmakers are trying to sound the alarm. A group of 26 House Democrats from swing districts, led by Rep. Lauren Underwood (D-Ill.), sent a letter to leadership last week urging the extra subsidies to be extended.  

“I’m worried that we’re running up on a cliff,” said Rep. Susan Wild (D-Pa.), one of the signers of the letter, who compared it to the expanded child tax credit that was allowed to expire at the start of this year. “We’re suddenly going to lose that ability. It’s similar to the child tax credit, which, you know, just kind of came and went, the expiration of it. I just don’t want to see that happen. I think it is absolutely game-changing.”

Given Republican opposition to any increased spending on ObamaCare, an extension of the subsidies would have to be included in a party-line package using the reconciliation process to bypass a GOP filibuster in the Senate.  

The problem for Democrats is that negotiations over that broader package with Sen. Joe Manchin (D-W.Va.), the key swing vote, have shown few signs of progress for months.   

But the health care cliff is adding increased urgency for Democrats to find a way forward on the package.  

Frederick Isasi, executive director of the health care consumer advocacy group Families USA, said awareness is growing on Capitol Hill about the problem.  

“In the last couple weeks we’ve seen much greater focus coming to bear on this,” he said.  

“It’s moved from some key staff understanding that this is a real problem to members,” he added, as well as people working on campaigns. “I think the members are finally starting to become aware.” 

The premium increases would be substantial if Congress does not act, with an average rise of around 53 percent, affecting roughly 13 million people, according to the Kaiser Family Foundation.  

Middle class people making more than 400 percent of the federal poverty line would be especially hard hit, given that they would go back to not being eligible for any financial assistance and have to pay the full cost of their premiums.  

Vulnerable Democrats are also pushing to lower prescription drug prices, a centerpiece of Democrats’ recent campaigns that also faces time pressure as the window for a major economic package before the election narrows.  

Wild led a separate letter with swing-district lawmakers earlier this month pushing for action on drug prices.  

“There often are not things that we can specifically do to bring down inflation but what we can do is reduce people’s costs, and health care costs, whether it’s prescription drug prices, or health insurance premiums, is a huge part of that,” Wild said.  

Manchin, the key swing vote in the Senate, has been a supporter of both action on drug prices and on the Affordable Care Act subsidies in the past. The question is less whether he will support those specific elements and more whether he can reach a deal with Democratic leaders on the broader package.  

Wild said that a fallback option should be a health care-only package, if a broader deal cannot come together. “As far as I’m concerned, it should be an option,” she said.  

A Democratic strategist said that the looming health care subsidy cliff had “reinvigorated peoples’ interest” in finding a deal on the larger package. 

“People are certainly worried about it and hopeful that it will get resolved,” the strategist said. “This would be a self-inflicted wound if Democrats let it happen, but there is growing desire to avoid the cliff.” 

The flip side is the cost to the government of the extra subsidies, which the Congressional Budget Office estimated would cost about $70 billion for a three-year extension.  

Adding to the complexity, experts say the Affordable Care Act marketplaces need time to set up their systems before the enrollment period, meaning waiting to the last minute to extend the subsidies would pose operational difficulties.  

“Congress would ideally have to pass legislation by the end of August,” said Levitt, of the Kaiser Family Foundation. “Even the end of August would be pushing it.”