In March of 2021, the Democrats rammed through a $1.9 trillion spendapalooza called the “American Rescue Plan Act” (ARPA). There was something for everyone in the plan, including even more generous subsidies for people who purchase insurance through the Obamacare website.
The ARPA extends eligibility for ACA health insurance subsidies to people buying their own health coverage as well as increases the amount of financial assistance for people at lower incomes who were already eligible.
Joe Biden was very proud of himself. But the Act’s Obamacare provisions are going to expire on December 31, 2022. So at just about the time people will be headed to the polls for midterms, they’ll receive a notice that their insurance premiums are about to rise precipitously.
The scenario has alarmed vulnerable lawmakers and White House allies, who have privately warned senior Democrats in recent weeks that the issue could cost Democrats control of the Senate and decimate their hard-earned reputation as the party of health care.
In polling, voters consistently rank health care affordability as a top domestic concern, second only to inflation. The enhanced subsidies — passed last March as part of Biden’s American Rescue Plan — have also pushed Obamacare sign-ups to new highs, adding 2.5 million new enrollees in a single year.
The fix for the Democrats’ dilemma is found in the (Don’t Call It) Build Back Better bill. And the roadblock there, as it always has been, is Senator Joe Manchin, who believes the bill is just too expensive during a period of rapidly rising inflation.
Maintaining the subsidies is projected to cost tens of billions of dollars per year. And with Republicans uniformly opposed to continuing them, tucking an extension into the broader partisan bill is the last available option before the midterms.
That’s added yet another wrinkle to a negotiation between Manchin and Democratic leaders that has so far focused on just three areas: climate provisions, drug pricing and deficit reduction.
Staffers for Manchin and Senate Majority Leader Chuck Schumer have spent the last couple weeks exchanging preliminary ideas for what the framework of a bill might look like, three people with knowledge of the matter said. The discussions have boosted hopes that an agreement remains in reach, though there is little expectation of a breakthrough before Memorial Day.
Manchin will come around. He doesn’t want to entirely sink his party’s chances in 2022 or 2024 so he will sign off on climate change legislation and drug pricing.
But Manchin probably won’t sign off on the Obamacare subsidy plan. It would add too much to the deficit and give a boost to inflation, which is already too high.
Whatever political benefit Biden for Biden that comes out of the revised reconciliation bill will be too late to save the Democrats in 2022 and won’t matter by 2024.
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