Can Generous Health Insurance Subsidies be a Gift that Keeps Giving?

As a self-employed small business owner, I marvel at how easy and inexpensive it is to sign up for coverage on Healthcare.gov. This is one of the few bright spots of pandemic living. But as someone who has written about health insurance for 34 years, I wonder about the longer term prospect of finding affordable health insurance.

My monthly premium has plummeted and is shockingly next to nothing since the floodgates opened on federal government subsidies in 2021. Household income in all 50 states must be between 100% and 400% of the federal poverty level to qualify for a premium tax credit that can lower the cost of insurance. I just didn’t realize how low that magic number would go for me, which will come in mighty handy when it comes to paying other bills.

Plenty of my fellow Americans are likely experiencing the same pleasant surprise. More than 14 million Americans signed up for health insurance during the 2022 enrollment period. That’s a record number under the Affordable Care Act. What’s astonishing is that the number of U.S. residents without health insurance plummeted to about 28 million in 2020 from nearly 48 million in 2010 when the ACA became a landmark, albeit controversial, law.

The beauty of affordable health insurance is that it helps combat a reluctance to ration, defer or avoid medical care because of financial concerns. And as I suggested, it also helps free up money for other household expenses.

On top of that, expanding access to health care will result in better outcomes, which is hugely important considering how unhealthy Americans are – with about two-thirds of the country being overweight.

But that’s just the tip of the iceberg. Those who are obese are at a higher risk for developing diabetes, hypertension and heart disease. They’re also more prone to having a heart attack or stroke. Another layer worth mentioning is our growing dependence on prescription drugs and addiction to opioids. Given this perfect storm of poor or questionable health, it’s not surprising that we spend nearly 20% of our gross domestic product on health care.

This is why I’m so concerned about what happens in years to come. While generous subsidies are a welcome change for so many of us, the strategy may prove to be nothing more than a collective Band-Aid over serious wounds. Put another way, the current situation could create a false sense of security.

What happens, for example, if Republicans sweep mid-term elections (as expected) and reclaim their power in Congress and possibly take back the White House in 2024? Surely, they’ll end those subsidies as part of a larger effort to curtail federal spending and stench the bleeding on our unmanageable national debt.

But in the absence of a meaningful plan to keep health insurance affordable for Americans who are struggling to make ends meet, the vicious cycle of health care rationing or avoidance will repeat, and torpedo any progress that was made. If history is our guide, that would be the expectation. The GOP failed to deliver on its promise of repeal and replace after Trump took office.

And, without health care market reforms beyond toothless executive orders that actually create stiffer competition and lower price points, as well as hold health insurers, hospitals, pharmaceutical companies and other players more accountable for price transparency and patient advocacy, our for-profit system could collapse under its own weight. That would revive calls for a single-payer system, or Medicare for all as the Democrats have attempted to reframe it – sparking concern about ballooning costs, inefficiencies, exacerbated doctor shortages and patient wait times.
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Whatever ends up happening is anyone’s guess, but at least for now I will enjoy a year of monthly premium “holidays,” for all intents and purposes, and pocket that windfall for other purposes.