As of now, Sen. Joe Manchin III appears to be the primary obstacle to renewing the enhanced subsidies, which originally passed in the American Rescue Plan. Though the West Virginia Democrat is in negotiations with his party’s leaders about some sort of extension of the subsidies, if this doesn’t happen, he’ll be the reason.
As bad as this appears, there are other hidden reasons this is suddenly so urgent. First, if it isn’t resolved within the next month, states might need to assume it won’t happen and act accordingly. Second, if Democrats can’t get Manchin to come around, they risk squandering a political advantage on health care that took them literally a decade to build.
The 2021 pandemic relief bill included enhanced subsidies under the ACA for people who buy private insurance on the exchanges. Around 13 million Americans benefited from them, allowing them to pay significantly less for their health coverage. For many people, it reduces insurance costs down to zero.
An extension of the enhanced subsidies was supposed to be part of Build Back Better — but Manchin killed that bill. His comments on the extension have been vague; he has said he’s open to it, but wants to make sure the subsidies don’t go to wealthy families. Yet the subsidies are already means tested, and always have been.
In his negotiations with Democratic leaders about whether parts of BBB can be salvaged — including renewing the ACA subsidies — Manchin has insisted on bringing down the deficit. That seems to make joining an enhanced subsidy extension with prescription drug reform — which would save huge amounts that could then offset the cost of the subsidy extension — a requirement.
But if the enhanced subsidies disappear at the end of the year, 3 million people will lose their coverage because it will become unaffordable for them, and another 8.9 million will see their premiums rise by an average of $406, according to the Department of Health and Human Services.
“We have a big sense of urgency about this,” Rep. Suzan DelBene (D-Wash.), head of the New Democrat Coalition of moderate and front-line Democrats, told us.
DelBene notes that Congress must act to renew the subsidies by the end of July. If not, she said, states will have to assume that they’re going to expire, and deliver notices of rate increases.
What’s more, this threatens to squander a political advantage that Democrats have painfully built up on the health-care issue over the course of years. Recall the larger context: After Democrats passed the ACA in 2010, they confidently predicted the public would come to like it. But that took far longer than expected.
Democrats lost dozens of House seats in the 2010 midterms, in part because of passage of the ACA. And implementation challenges that followed helped cost Democrats the Senate in 2014.
But then, after President Donald Trump and Republicans tried to repeal the ACA, the public tide turned. The ACA became popular, and Democrats won the House in a 2018 wave — partly driven by the same issue that previously cost them so much ground.
In short, it took years, but ultimately, Democrats were able to win the argument. The public embraced the ACA and the role it assigned the government in moving toward universal health care. Then they built upon that, with the American Rescue Plan’s expansion of ACA subsidies amid a public health crisis.
After all this, will Manchin really put Democrats in the position of backsliding, in terms of both the numbers of uninsured and the political blowback expiration could unleash?
“In 2018, the ACA was absolutely critical to Democrats taking back the House,” Dan Sena, the Democratic strategist who oversaw the party’s 2018 House races, told us. “Now, as we come out of covid, it would be foolish for Democrats to squander this opportunity.”
All this becomes more absurd amid the Supreme Court’s gutting of the constitutional right to abortion. That has the potential to galvanize voters against Republicans in the midterms.
Yet letting enhanced ACA subsidies lapse could muddy the contrast that Democrats might draw on that front, Sena noted, with “women’s health being on the ballot this year.”
Beyond the politics, it’s galling that after years of scraping and clawing some of the way toward the holy grail of universal health care, while suffering major political losses in the process, Democrats may now be forced to regress away from that goal.
“We made progress with the American Rescue Plan,” DelBene told us. “And we want to keep that going.”