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Healthcare: Two bad ideas


  • ACA Tax Credits: As part of a COVID relief package last year, Congress made the ACA’s premium tax credits more generous and lifted the income cap on eligibility for subsidies for 2021 and 2022.  The Biden administration wants Congress to make the extra subsidies and new eligibility permanent.A Wall Street Journal editorial said this is a terrible idea, and we agree. “A time-honored political trick is to pass a ‘temporary’ subsidy that people get used to and then cry hardship when the emergency program ends,” the editors wrote. 

    “Healthcare analyst Doug Badger notes that smaller firms that aren’t subject to the Affordable Care Act’s mandate to provide insurance ‘will have strong incentives to discontinue job-based coverage,’” the editors explained.  The taxpayer-supported ACA plans largely replace private coverage that people had before—one of many reasons to reject the plan.  

    The editorial also cited a paper Brian Blase wrote for the Galen Institute, “Expanded ACA Subsidies: Exacerbating Health Inflation and Income Inequality,” explaining that “A family of four with a 60-year-old head of household earning $265,000 could end up eligible for more than $7,800 a year in taxpayer subsidies.”

    The added subsidies are highly regressive, as Brian’s example explains. If made permanent, it will erode employer coverage and drag millions more people into government coverage.

  • Family Glitch: The Biden administration also is pushing an illegal regulatory action that would pull even more people into Obamacare plans. The wormhole it’s using is a so-called “fix” to the “Family Glitch,” a statutory provision of the ACA that disallows dependents from signing up for Obamacare subsidies if a family member is eligible for affordable coverage at work.

    In addition to lacking a basis in statute, the proposed regulation would harm many of the families it purports to help, impose new financial burdens on states, and increase the federal debt and inflation without appreciably expanding health coverage.

    Further, it would show that an administration can simply rewrite through regulatory action laws passed by Congress—with all of the associated spending.  This is very dangerous indeed and must be blocked.

    We will be submitting a comment letter opposing the proposed rule, which we will send you next week.  Tom Miller of the American Enterprise Institute has posted a good explanatory blog about it. 

Expanding Obamacare is a terrible idea. The ACA has driven up health costs, reduced choices, and made it harder for sick people to get care—all while giving a blank check from taxpayers to health insurers, hospitals, and other big health care businesses.  

We must get the federal government out of the business of micro-managing our health care. Health care is too local and personal for a one-size-fits-all approach to work.  We are anxious to shift our focus to proposals that will unleash the innovation and energy that are pent up in our health sector. Our goal is to return power to doctors and patients.  That is our task next year and for many years to come.


Grace-Marie Turner is president of the Galen Institute.