By Brendan Scanland
WASHINGTON, D.C. – After another failed procedural vote in the Senate on Wednesday, the federal government remains shut down for an eighth day — with no deal in sight.
Both parties continue to blame each other for the stalemate, which is tied to a heated fight over Affordable Care Act (ACA) subsidies, also known as Obamacare.
For the sixth time, the Senate failed to advance dueling short-term funding bills — one from Republicans and one from Democrats. Neither proposal received the 60 votes needed to move forward.
Republicans are urging Democrats to back their proposal without additional spending.
“What they’ve tried to do is hijack this to get $1.5 trillion in new spending,” said Senate Majority Leader John Thune (R-SD.). “There’s no universe in which that’s going anywhere around here.”
Democrats say they’re standing firm on protecting the enhanced ACA subsidies enacted under the Biden administration’s COVID relief measures, which helped millions afford health insurance.
“At least 1.6 million New Yorkers in every corner of our state are on the brink of seeing their premiums skyrocket — all because congressional Republicans refuse to extend the health care assistance that families rely on,” said Sen. Kirsten Gillibrand (D-N.Y.). “This is a Republican-manufactured health care crisis that low- and middle-income New Yorkers simply cannot afford.”
Failing to renew the subsidies could double premiums for ACA marketplace enrollees, according to the nonpartisan research group, KFF.
For many Americans without employer-based coverage or who are self-employed, Obamacare remains one of the few affordable health insurance options.
“We can and must do both. It’s not an either-or: End the shutdown and protect Americans’ health care. It’s not a choice. Republicans don’t have to make it one,” said Senate Minority Leader Chuck Schumer (D-NY.).
The Biden-era subsidies made the ACA more popular than ever, with more than 24 million people currently enrolled.
However, some critics argue the expansion has led to an increase in improper enrollees and fraud.
“Part of what’s going on is that increased enrollment is actually an increase in improper enrollees, fraud and people who aren’t using the benefit at all,” said Adam Michel, director of tax policy studies at the Cato Institute. “They removed the income caps from these subsidies, they expanded the subsidies for people up and down the income scale — up to earning almost $600,000 a year.”
Democrats want to make the expanded subsidies permanent. The Congressional Budget Office estimates a permanent extension would increase the deficit by $350 billion from 2026 to 2035 and boost the number of people with health insurance by 3.8 million by 2035.
Michel said the move would add billions to the deficit while also lining the pockets of insurance companies. According to the Cato Institute, a recent analysis shows 6.4 million improper enrollees could cost taxpayers $27 billion in 2025, with 11.7 million people filing zero claims. According to the Paragon Health Institute, health insurer stocks have surged 1,000% since the ACA’s passage.
“This was a temporary expansion of a program that should be allowed to fall back to its pre-pandemic levels,” Michel said.
“These subsidies go directly to insurance companies. It’s called a tax credit, but that’s pretty misleading. Almost all enrollees send the credit payment to insurance companies to lower their on-paper premium. The majority of that benefit is captured by the insurance companies because for many enrollees, especially with the expanded subsidies, their premium is zero. It allows insurance companies to increase prices and shift all of that cost onto the American taxpayer,” Michel explained. “They distort markets… They paper over broader problems in our health care markets.”
