Health care experts are criticizing an Obamacare expansion quietly added to the latest CCP (Chinese Communist Party) virus stimulus bill, arguing that it mostly benefits richer households and insurance companies. They say most of the bill is going toward things other than ending the pandemic as soon as possible.
While the $1.9 trillion relief bill has been scrutinized over its funding a range of industries not directly related to the pandemic, such as five transit projects that collectively would cost more than $175 million, coverage on the expansion of Obamacare—also called the Affordable Care Act—has been scarce.
Doug Badger, visiting fellow in domestic policy studies at the Heritage Foundation and a former policy adviser to the White House, the U.S. Senate, and the Department of Health and Human Services, noted that most of the new spending in the Obamacare expansion will benefit people who are already heavily subsidized.
“It’s a solution in search of a problem,” Badger told The Epoch Times. “Insurance company regulatory filings show no spike in the number of uninsured people. Nor does the Congressional Budget Office (CBO) believe that the expansion will materially change the number of uninsured.”
“Instead, insurance companies will benefit most by receiving even larger government subsidies on behalf of people who already have coverage,” he added. “The administration is misleading people to believe that the legislation is needed to combat the pandemic.”
The stimulus bill expands the Affordable Care Act subsidies for two years at a cost of $34 billion. The expanded subsidies are set to expire at the end of 2022, less than two months after the next congressional elections, Badger said, adding that the country can expect the administration and its allies to call for extending the expanded subsidies rather than “cutting benefits” to millions of people with Obamacare coverage.
Senate Democrats pushed the bill through to a debate on March 4 with the help of Vice President Kamala Harris to break the 50-50 tie. On March 6, the Senate passed the $1.9 trillion relief plan in a party-line vote. Republicans tried to add around three dozen amendments, albeit unsuccessfully.
Brian Blase, who served as special assistant to President Donald Trump at the White House’s National Economic Council, said the subsidy expansion largely replaces private spending with government spending. The stimulus provides substantial new health-insurance subsidies to upper-income households, describing in a recent op-ed an example of how a 60-year-old couple with two children making $200,000 would receive a subsidy of $12,000.
Blase, a key architect of Trump’s health policy agenda, said he believes the latest legislation is “reckless.”
“It is not intended to provide Americans relief from the coronavirus, and is immoral for our nation’s youth and future generations of Americans who will have to pay all this back,” Blase told The Epoch Times.
“In some parts of the country where premiums are high, families with incomes exceeding half a million dollars will qualify for thousands of dollars in subsidies to buy an ObamaCare plan,” Blase notes. “In contrast, a family of four making $40,000 receives an added benefit of just $1,600.”
The CBO estimates that the expanded subsidies will cut the average number of uninsured by one million at a cost of $34 billion over the two years, he notes.
Blase told The Epoch Times that 75 percent of the Obamacare subsidy expansion represents crowd-out, meaning the government is just replacing what households would have spent with their own resources, citing CBO estimates. The COBRA subsidy expansion, which is now the federal government paying 100 percent of premiums, will represent a lot of crowd-out as well, he added.
He noted that for this year and the next year, the Democrats are proposing to make these subsidies “more generous for everyone who is already eligible and to remove the cap so even rich people can qualify.” The current proposal benefits upper-income households far more than lower-income households.
The 10-year cost if the temporary expansions are made permanent “could easily be $500 billion,” Blase told The Epoch Times.
“The new subsidies will be much larger than the value of the tax exclusion for employer-sponsored coverage. I believe it will be foolish for most employers with fewer than 50 workers to offer coverage,” he said. “They can raise wages and their workers can qualify for large subsidies.”
Aside from the monetary aspect, the bill has also been criticized for being pushed through without bipartisan support or much discussion. Harris had to break the tie in the 50-50 divided chamber with her vote.
As Senator Cindy Hyde-Smith (R-Miss.) highlighted in a graphic posted on her Twitter account, the five previous pandemic relief packages had passed with near-unanimous bipartisan support. Hyde-Smith notes she would have “easily supported a new, targeted package where it’s needed.”
“We should be moving forward together, not like this,” Hyde-Smith wrote on Twitter on March 5.
After 5 bipartisan #COVID19 relief packages, Dems are pushing through a ~$2 trillion liberal policy wish list under the guise of #CovidRelief. I would have easily supported a new, targeted package where it’s needed. We should be moving forward together, not like this. pic.twitter.com/LLlFCsAB1r
— U.S. Senator Cindy Hyde-Smith (@SenHydeSmith) March 5, 2021
David Schein, a professor and Associate Dean for Graduate Programs at the University of St. Thomas, said the stimulus bill as it is now “would only pass with one-party support.”
“The sneaky proposal to revive Obamacare by taking $44 billion plus $16 billion from hard-working taxpayers through a provision in the fake COVID Stimulus Bill is unconscionable on its face,” Schein told The Epoch Times. “That does not sound like Biden’s ‘unity’ pledge.”
The stimulus bill creates work disincentives by making everyone who is receiving unemployment benefits eligible for free Obamacare, said Doug Badger.
“When coupled with the additional $400 per week unemployment bonus proposal, the prospect of free health insurance would make many individuals financially better off unemployed than working,” Badger told The Epoch Times. “This added work disincentive in the American Recovery Act could impede economic recovery and hurt unemployed workers in the long run by reducing their employment and income prospects.”
As soon as the Senate began considering the bill, Sen. Ron Johnson (R-Wis.) forced the chamber’s clerks to begin reading the entire 628-page measure aloud. He was the only senator at his desk for most of the night, appearing to follow along silently, one sheet at a time.
As the night dragged on, he stood every so often and paced the perimeter of the chamber, reading as he walked. He said earlier that he was doing it to “shine the light on this abusive and obscene amount of money.”
“After listening to the entire 11 hours of the reading of this bill, it’s clear this is not a COVID relief bill,” Johnson said in a March 5 Twitter post. “It’s amazing how much spending is for 2022-2028. This is just a Democrat wish list.”
The Associated Press contributed to this report