Bending the Arc

In three weeks, many of the government subsidies that help people afford health insurance will expire. According to a December 10 article in Popular Information, a newsletter dedicated to accountability journalism, if the subsidies are not extended before the end of the year, the impacts will be cataclysmic.

The 22 million Americans who currently receive these subsidies will see their premiums increase by an average of 114%. According to an analysis by the Urban Institute, families with incomes below 250% of the poverty line will pay premiums that are more than four times higher — rising from $169 to $919. Meanwhile, an estimated 4.8 million people will lose coverage completely because they are priced out of the market. Uninsured people, of course, continue to get sick and require emergency medical care. The Robert Wood Johnson Foundation projects “a $7.7 billion spike in uncompensated care in 2026” if the subsidies expire.

The impact will be most severe in large states that have not expanded Medicaid, including Florida and Texas, because they rely on the Obamacare marketplace to cover many of their low-income residents. Those states will see their uncompensated care costs rise by as much as 25%. A study by the Commonwealth Fund also estimates that failing to extend the subsidies will result in the loss of 339,100 jobs due to reduced health care spending.

All Democrats support a bill drafted to extend enhanced health insurance subsidies for three years. Two key Republicans are aiming for a vote this week in support of a plan which involves funneling the subsidy money directly to HSAs rather than to insurance companies. This will allow patients to buy insurance from insurance companies of their choice, and is expected to drive premiums down, but many are split on how this will work, and the plan is not supported by all Republicans. All legislators agree that failing to do something to address rising health care costs would be a catastrophe.