Lubbock Times

On June 24, 2024, Congressional Budget Office (CBO) Director Phillip Swagel and Joint Committee on Taxation (JCT) Chief of Staff Thomas Barthold responded to a letter from House Budget Committee Chairman Jodey Arrington (R-TX) and House Ways and Means Committee Chairman Jason Smith (R-MO). The letter requested an 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 wealthiest individuals, including those earning up to $599,000 annually.

The CBO and JCT reported that permanently extending these expanded subsidies would cost taxpayers $383 billion over the next decade. Additionally, they confirmed that high-income individuals would receive fully taxpayer-subsidized health insurance under this policy.

Five years ago, annual spending on Obamacare subsidies was $57 billion. In 2024, it is projected to more than double to $125 billion. Making these expanded subsidies permanent is expected to further increase costs as health insurance prices rise due to inflationary pressures from the subsidies.

Chairmen Arrington and Smith issued a joint statement: “President Biden used the COVID crisis to advance Democrats' long-standing goal of expanding government-run healthcare. Now, he wants to make permanent these expanded Obamacare tax credits without means-testing, providing taxpayer-subsidized health insurance to some of the nation's wealthiest - including those making up to $599,000 - and adding $383 billion to the deficit over the next decade."

They added: "At a time when we are experiencing a record $35 trillion national debt with healthcare expenditures accounting for nearly 18 percent of GDP, it is unconscionable that Democrats would continue to push for massive taxpayer-funded handouts to the wealthy and large health insurance companies.”

The letter further noted: "The agencies also estimate that under a permanent extension, roughly 30 percent of marketplace enrollees, or about 7 million people, would enroll on plans with fully subsidized premiums," meaning permanently extending the expanded subsidies will continue to provide free healthcare at taxpayer expense.

Background information indicates that Democrats’ American Rescue Plan Act (ARPA) allocated an estimated $34 billion temporarily increasing premium tax credit subsidies for ACA plans while removing income limits on eligibility. Subsequently, their “Inflation Reduction Act” spent an estimated $64 billion extending these subsidies through 2025. President Biden’s Fiscal Year 2025 Budget Request includes a proposal for making these extensions permanent at an estimated net cost of $383 billion over the budget window.

Critics argue that these extended ACA premium tax credits have contributed to rising health insurance premiums by giving insurers increased pricing power. The national debt approaches $35 trillion with interest costs amounting to $892 billion in 2024 alone.

House Budget Committee and House Ways and Means Committee Republicans advocate restoring fiscal responsibility and ensuring taxpayer dollars benefit those most in need.