Where did all the subsidies go?

About 13 million Americans are benefiting from the temporary increased subsidies for Affordable Care Act health insurance premiums as part of the American Rescue Plan.

Those subsidies will expire at the end of 2022 – or are scheduled to. Premium increase notices will go out in October – you know, the month before Election Day.

The Centers for Medicare & Medicaid Services (CMS) estimates average premiums will increase by 53%, from $13.7 billion to $20.9 billion – a $7.3 billion hit to family budgets for those who use a federal ACA exchange.

If the subsidies are extended, it’s just one more deficit item. The Department of Health and Human Services (HHS) reports that ARPA subsidies for existing consumers cost $537 million per month. This will increase as more people enroll.

5 comments

  1. BenefitJack says two things will happen. Dwayne says one of two things will happen. I say only one thing will happen in mid-October, about 3 weeks before the election. The subsidy will be extended, perhaps made permanent, as a stealth step towards Medicare for all. No politician in either party wants to be blamed for a 50% increase in Obamacare rates weeks before their election.

    It will be a Party line vote because know they can count on the Dems to pass it, but a few Repubs will help in the Senate.

    That way Dems can tell their Base they saved it and Repubs can boast to their Base they tried to govt from wasting money while not admitting that their base should thank the Dems for protecting their economic interests.

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  2. Actually, what may happen is that they can’t get approval to delay the announcement, nor to extend the subsidies, so two things will happen. The D’s will blame the R’s for not extending the subsidies. And, the D’s will try to take credit for the additional reduction in the annual deficit in the 2022 – 2023 federal fiscal year.

    What won’t happen is any informed debate/discussion that confirms whether the subsidies were ever needed, or appropriate, let alone whether they should be continued.

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  3. One of two things will happen. The subsidies will be extend to buy votes for the midterms or the mailing will be delayed so that rate increase will arrive after the elections. Since the election is late this year (Nov 8th), I am betting for the extension of subsidies.

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  4. If we can send $40 billion to the Ukrainian government then the subsidies are a drop in the bucket. The federal government spends money lavishly on everything they do designate and then leaves people to worry whether social security will be cut or Medicare will increase and how they will retire. Enough is enough.
    Sorry for the rant but we need to take care of the budget here at home and the people here should feel supported by the politicians instead of being divided and left to worry over their futures.

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