Tag Archives: Affordable Care Act (ACA) subsidies

The Numbers Just Keep Growing

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On Saturday, Just the News posted an article about the number of people who were enrolled in ObamaCare without their knowledge.

The article reports:

In exchange for gift cards, millions of Americans were unwittingly signed up for Obamacare by brokers who scalped their vital information and enrolled them in plans where premiums were paid by the American people, a research group says.  

“The government was sending massive checks to insurance companies who were making windfall profits on behalf of people who didn’t use any health care,” Brian Blase, president of Paragon Health Institute, a healthcare policy group told Just The News.

A 2021-2022 expansion of Affordable Care Act subsidies, passed through budget reconciliation, made coverage fully subsidized for individuals claiming incomes in a specific range. Paragon Health Institute investigated and estimated that by 2025, at least 6.4 million more people were enrolled in these zero-premium plans than were actually eligible.

Zero premium means the enrollee did not pay for the plan — it was paid via subsidies funded by taxpayers.

The money went to the insurance companies who never had to deal with claims from people who didn’t know they were signed up!

The article notes:

Many of the enrollees never realized they had coverage because the government paid the full premium directly to insurers, which in turn paid substantial commissions to the enrolling entities. In 2024, 40% of people in fully subsidized plans used no healthcare services at all—2.5 times higher than typical rates—resulting in significant government payments to insurers for largely unused coverage.

Making matters worse, the insurance companies aren’t even providing value, says Blase. “85% of all the [insurance company] revenue now comes from the taxpayer, so they don’t have incentives to offer products that are low-priced, that appeal to patients.”

“Their primary client now is the United States Treasury, and they’re so dependent on the federal government for their revenue source, that’s why insurance companies are spending hundreds of millions of dollars lobbying Congress to continue this gravy train of these enhanced Obamacare subsidies.”

The article concludes:

One remedy for Medicaid, as well as other programs, is to shut off the federal spigot. According to Blase, “It’s the essential step. The federal government is bankrolling the fraud, waste and abuse in the states, and as long as states can draw on an open checkbook from Washington, they don’t have incentives to make sure that dollars are appropriately spent.”

Referencing the daycare fraud unfolding in Minnesota, Blase criticized the federal government’s lack of oversight. “We shouldn’t have to rely on amateur investigators going into daycare finding out that there’s no children there. The government has access to this data, they know where there are areas that have seen explosive spending.” 

Blase also sounded the alarm on states like New York and California. In New York, there has been an unprecedented spike in Medicaid-funded home health aides, who are often family members taking care of relatives, which, Blase says, also creates fertile ground for fraud. In California, fraud has found a home within the hospice care industry. 

We need a thorough audit on every dollar the federal government sends to the states and to insurance companies.

What Happens Next

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The Senate has voted to end the government shutdown. CNBC posted an article on Monday (updated Tuesday) explaining what happens next.

The article reports:

  • The Senate passed a bill to end the U.S. government shutdown.
  • House Speaker Mike Johnson called for House members to travel to Washington, D.C., so that they can vote as soon as possible on the deal.
  • To end the shutdown, the House needs to pass the Senate bill, and then President Donald Trump must sign it into law.

There are some grumblings among more liberal Democrats that they will try to stop the bill in the House, but I don’t think they will succeed.

The article notes:

House members were told that votes on the deal could begin by 4 p.m. ET on Wednesday.

Before the Senate vote, Johnson refused to commit to the deal’s key guarantee to Democrats: that Congress will hold a separate vote in December on potentially extending enhanced Affordable Care Act subsidies. That vote would be on a bill of the Democrats’ choosing, according to the Senate agreement.

“I’m not committing to it or not committing to it,” Johnson, R-La., said Monday on CNN.

Those subsidies, which are due to expire at the end of December, help reduce the cost of individual health insurance plans for more than 20 million Americans.

What the article fails to mention is that the subsidies go to the insurance companies rather than to the people buying the insurance. The insurance companies have no incentive to lower premiums or cut costs. The impact of the subsidies going to the insurance companies on the price of insurance is similar to what happened to college tuition when the government got involved in the student loan program. When you take away incentive to lower prices, prices do not get lowered.

The article concludes:

The Senate deal would fund the government through the end of January; reverse all shutdown-related layoffs of federal employees; and guarantee that all federal workers will be paid their normal salaries during the shutdown.

The deal also includes provisions for a bipartisan budget process and prevents the White House from using continuing resolutions to fund the government.

CRs have been repeatedly used to avoid government shutdowns, but are controversial because they frequently avoid lawmakers having to make decisions about long-term funding of the government that a normal budget would resolve.

The deal would also fund, through September, the SNAP program, which helps feed 42 million Americans through food stamps.

Under a federal law passed in 2019, government employees who are furloughed during a shutdown must be paid for the time they were out of work at their standard rate of pay “at the earliest date possible, regardless of scheduled pay dates.”

There Is Nothing Quite So Immortal As A Government Subsidy

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One of the reasons the Democrats are refusing to approve an continuing resolution to keep the government open is that they want to restore the spending that got eliminated in the Big Beautiful Bill. That spending includes a continuation of some of the money that was supposed to be temporary spending due to Covid. Just for the record, Congress has passed 36 continuing resolutions to fund the government rather than following the regular budget process since the senator took office in January 2009 (source here). So why is this continuing resolution different? It isn’t. However, the current politics of the Democrat party is different. The government shutdown is the result of the battle between the sane and insane elements of the Democrat party. The insane element is the socialist wing that keeps moving farther left. The sane wing is the old-school Democrat wing that will occasionally bend in order to keep things moving forward.

On Tuesday, Breitbart reported:

House Minority Leader Hakeem Jeffries (D-NY) rejected a one-year extension of Obamacare subsidies, which Breitbart News has reported that Democrats essentially shut down the government over.

The Hill reported that while Rep. Jen Kiggans (R-VA) is advocating for legislation that would “extend enhanced Affordable Care Act tax credit” until the end of 2026, Jeffries criticized Republicans for thinking “Democrats are going to go along with a one-year extension” of the Affordable Care Act (ACA) subsidies:

Rep. Jen Kiggans (R-Va.) is pushing legislation to extend enhanced Affordable Care Act tax credits, which expire on Jan. 1, through the end of 2026. The proposal has bipartisan support, and some political observers view it as a launching pad for securing a deal to reopen the government.

Jeffries, though, has other ideas, saying a one-year extension is “a non-starter.” He emphasized that President Trump and Republicans had adopted a permanent extension of tax cuts for the country’s wealthiest people earlier in the year. With that in mind, he’s demanding a similarly permanent extension of the enhanced ACA subsidies, which overwhelmingly help working class people.

Actually, if you really wanted to help working class people, you would get rid of the subsidies, let Obamacare die, and get the government out of healthcare. That would help everyone.

The article concludes:

While Democrats argue that “the loss of enhanced subsidies will result in the widespread loss of Americans’ health care,” Michael Cannon, the director of health policy studies for the Cato Institute explained that the enhanced subsidies “subsidize people making from $129,000 all the way up to $600,000 per year.”

Cannon described them as “Obamacare subsidies for the wealthy.”