Lubbock Times

House Budget Committee Chairman Jodey Arrington (R-TX) and House Ways and Means Committee Chairman Jason Smith (R-MO) have written to Congressional Budget Office (CBO) Director Phillip Swagel and Joint Committee on Taxation (JCT) Chief of Staff Thomas Barthold. The letter requests a comprehensive analysis of the budgetary effects of making permanent the enhanced Obamacare subsidies, as proposed in President Biden’s budget. These subsidies have been extended to some of the nation's highest earners, including those earning up to $599,000 annually.

In their letter, Chairmen Arrington and Smith express concerns about the growing cost of taxpayer-funded premium tax credits and their impact on driving up insurance costs for all Americans. They wrote: “The ACA premium tax credit expansion needlessly spent well over $100 billion of tax dollars for a minimal reduction in the number of uninsured. It is particularly concerning that, by removing the income eligibility limit, some of our nation’s highest earners are now eligible for government assistance."

The chairmen further highlighted that in certain areas of the country, families earning as much as $599,000 in 2023 could qualify for taxpayer-funded subsidies. They noted: "Particularly concerning to both consumers and taxpayers, the expanded ACA premium tax credits have had an inflationary effect on health insurance premiums by providing insurers increased pricing power, as the cost of tax credits grow dollar for dollar with benchmark premiums."

President Biden's Fiscal Year 2025 Budget Request included a proposal to permanently extend these expanded ACA premium tax credit subsidies at an estimated net cost of $383 billion over the budget window, including increased net interest outlays according to CBO.

The American Rescue Plan Act (ARPA) spent an estimated $34 billion to temporarily increase these premium tax credit subsidies while also removing income limits on eligibility for government assistance through Calendar Year 2022. Following this, the so-called “Inflation Reduction Act” spent an estimated $64 billion to extend these expanded ACA subsidies through Calendar Year 2025. By removing the income eligibility limit, families with household incomes up to $599,000 became eligible for taxpayer-funded subsidies.

The letter from Chairmen Arrington and Smith requests CBO and JCT to provide an analysis on the budgetary effects of making permanent the expanded Obamacare subsidies.