In the ongoing government shutdown saga, Democrats continue to cast themselves as defenders of affordable health insurance.
Without an extension of the enhanced Obamacare subsidies past their scheduled expiration at the end of this year, they argue, health insurance premiums will skyrocket in 2026.
As Sen. Bernie Sanders, I-Vt., recently put it, "This government shut down is all about whether Republicans will get away with raising health care premiums . . . "
Premiums have been on a steady upward trajectory for more than a decade.
Obamacare's own diktats are why premiums have risen.
Democrats have tried to obscure this reality with ever more taxpayer-funded premium subsidies.
Republicans must not bail out Democrats yet again for Obamacare's expensive health policy mistakes.
When President Biden first signed these enhanced subsidies into law as part of the 2021 American Rescue Plan Act, they were billed as a temporary measure intended to last only two years.
Then came the 2022 Inflation Reduction Act, which extended the tax credits until the end of this year.
Neither attracted a single Republican vote.
Now the Democrats are back for more, demanding that these subsidies remain on the books as a condition of reopening the government.
Democrats keep changing their argument in favor of the enhanced subsidies.
First it was the need to keep premiums down so people wouldn't drop coverage during the pandemic. Now it's to hide the fact that insurance premiums will have tripled between 2013, the year before Obamacare's exchanges opened, and 2026.
The enhanced subsidies have yielded some truly absurd policy consequences.
Consider, first, that the reform extended government assistance to Americans earning more than 400% of the poverty level — roughly $129,000 for a family of four.
As a result, a family earning $500,000 a year would qualify for a federal subsidy worth over $8,000.
It should be obvious that a health insurance market in which even households making half a million dollars annually qualify for government hand-outs to help pay for coverage is fundamentally broken.
The promise of federal premium subsidies has also led to a significant amount of fraud in the insurance market.
Research from the Paragon Health Institute estimates that more than 6 million people were improperly enrolled in the exchanges in 2025.
Manhattan Institute scholar Chris Pope has written that insurers claimed federal subsidies on behalf of more than 782,000 people in Miami-Dade County with incomes below 150% of the poverty level — even though only 669,000 residents have income that low.
The enhanced subsidies attempt to cover up the fact that Obamacare broke the insurance market. The law banned health insurers from turning away customers based on age or health status.
It required them to cover a list of ten "essential health benefits" regardless of whether a customer wanted or needed them. And it forbade them from charging older, sicker patients any more than three times what they charged younger, healthier ones.
In other words, Obamacare banned insurers from engaging in their age-old business of managing risk.
They responded the only way they could to stay solvent — by raising premiums. And taxpayers have covered some 90% of the increase, in the form of those premium subsidies.
According to the Congressional Budget Office, extending the Democrats' enhanced subsidies permanently would cost $350 billion over a decade.
Still, Democrats insist that all this spending is essential — and that allowing the subsidies to expire would financially ruin large segments of the country. But this kind of rhetoric obscures the fact that only a small share of Americans — 6.5% — benefits from these subsidies.
And again, this includes households earning nearly $600,000 a year. Is this genuinely worth shutting down the government over?
If premiums rise next year, it will be because Democrats effectively outlawed affordable coverage 15 years ago with Obamacare.
Now they're holding the federal government hostage to avoid responsibility for a mess they made.
Sally C. Pipes is President, CEO, and Thomas W. Smith Fellow in Health Care Policy at the Pacific Research Institute. Her latest book is "The World's Medicine Chest: How America Achieved Pharmaceutical Supremacy — and How to Keep It." Follow her on X @sallypipes. Read more of Sally Pipes' reports — here.
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