EDITORIAL: Nothing is free: Bill to extend ‘temporary’ subsidies fails

Senate Republicans on Thursday rejected efforts to create another long-term entitlement when the nation is $37 trillion in debt and counting. It was a wise move.

Democrats recently shut down the government for six weeks to pressure the GOP to extend “temporary” Obamacare subsidies passed to soften the blow of the pandemic. Democrats themselves voted for the sunset when the measure first passed, but then demanded that Republicans extend the program so recipients can pass premium hikes on to taxpayers.

An extension would cost as much as $500 billion over the next decade. And make no mistake: Even a short-term augmentation of the subsidies wouldn’t suffice. Does anyone believe that Democrats would ever agree to their demise?

That “temporary” assistance evolves into permanent support is business as usual inside the Beltway. In fact, those buying insurance on the exchanges will still benefit from the help codified in the Affordable Care Act. Only the COVID-era relief will evaporate. And it’s worth noting that eligibility requirements were also expanded during the pandemic, meaning many people who couldn’t remotely be considered impoverished were beneficiaries of the increased largess.

Out-of-pocket costs have actually been falling as a result of the generous subsidies. But nothing is free. “In 2015 Obamacare enrollees who received assistance paid about 36 percent of their premium out of pocket; by 2023 that share had fallen to 17 percent,” economic professors Tony LoSasso and Kosali Simon noted in a November commentary for The Wall Street Journal. “At the same time, the Kaiser Family Foundation finds that average net premiums for subsidized enrollees largely remained flat even as gross premiums rose because taxpayers absorbed the increase.”

In addition, a recent General Accounting Office analysis discovered rampant fraud in the enrollment process, potentially costing American taxpayers billions of dollars. The Democratic push for extending the subsidies does little to ensure that only those who truly need help actually receive it or to implement more stringent controls to address dubious claims.

Senate Republicans offered a fallback bill that would have expanded health savings accounts as an alternative to the premium subsidies. But Democrats rejected that approach, preferring to paper over the ACA’s deficiencies and to embrace dependency rather than empower individuals to make their own health care choices.

A bipartisan group of senators still believes a compromise is possible. But if it doesn’t include a hard sunset of the temporary subsidies, along with fraud controls and eligibility reforms, the GOP should pass and tout its more market-oriented approach through health savings accounts and other means.