Democrats and Republicans clashed over several issues during the government shutdown, which came to an end late Wednesday night. However, the enhanced subsidies for the Affordable Care Act—more commonly known as Obamacare—were by far the most prominent point of contention.
But why was that the case?
After all, if the situation were truly as straightforward as either side presented, then it shouldn’t be this controversial. So, with that dilemma in mind, let’s take a closer look at what’s really going on with the enhanced subsidies, and why they are emblematic of a much bigger problem.
To begin, it’s important to distinguish between the enhanced subsidies that will expire at the end of the year and the subsidies that have been around for more than a decade.
What are the enhanced subsidies?
Initially, the designers of the Affordable Care Act (ACA) thought asking participants to spend 2–10 percent of their income on premiums would make the program affordable for those who needed it. Where a person fell on that spectrum depended on their income level, with those just above the poverty line paying 2 percent while middle-income Americans would pay closer to the 10 percent cap. The remaining difference between the premiums set by insurers and what the individual or family had to pay was subsidized by the government.
We’ll take a closer look at the numbers in a minute, but for now, it’s important to understand that these subsidies remain in place. However, in 2021, Congress determined that more help was needed.
Back then, COVID was still a problem, and the economy had not recovered from the pandemic. At the same time, enrollment in the ACA had never reached the levels expected by its authors—or the levels necessary to make it financially viable. Yet Republicans had failed repeatedly to replace it with anything better.
So, Congress decided to throw more money at the problem and passed “enhanced” subsidies that redefined what was affordable, from 2–10 percent of one’s income to 0–8.5 percent.
The most significant change was for those who earned 150 percent or less of the federal poverty level (FPL). For them, coverage essentially became free, and their enrollment swelled in response.
However, reports of how much those rates are likely to increase have less to do with those at the bottom end of the income spectrum than with those toward the top of the scale.
Who is truly covered?
In addition to making health coverage free for those toward the bottom of the income spectrum, the enhanced subsidies also removed the cap on who was eligible. As such, anyone who wanted to sign up for the program could do so and pay no more than 8.5 percent of their annual income for coverage.
That’s currently set to revert to the original 400 percent of the FPL, which would be an annual income of roughly $62,600 for a single adult or $128,600 for a family of four. Anyone over that level will have to pay the full price, meaning most in this category will likely either look for alternative options or forgo health insurance altogether. And if enough people leave the system, it will drive up the prices for those who remain.
You see, the vast majority of the population already gets their health insurance covered through other means. Roughly half of the country—160 million—get coverage through their work, while Medicare and Medicaid cover another 120 million. That leaves about 40–50 million who fall somewhere in the middle.
Of that 40–50 million, about half are currently enrolled in the ACA, which is still a big jump from the 11 million who took part before the enhanced subsidies started. If the numbers go back to what they were in 2020, then it will make it even more expensive for those who remain, since most of those who leave will be the ones who tend to be healthy enough to see insurance as more of a luxury than a necessity and are cheaper to insure as a result.
So, what should the government do? As you might expect, there are lots of ideas, but there appear to be very few viable solutions.
Can Congress find an answer?
The Democratic side of Congress has made its position clear for quite some time. They want the enhanced subsidies extended for at least a year and were willing to shut down the government for a month and a half to try to see it done. Conversely, President Trump wants to take the money sent to insurance companies and give it to Americans to help them purchase their own healthcare. And some Republicans are trying to find a way to do just that.
Others in the Senate are open to negotiating an extension of the enhanced subsidies, but want to tie stronger abortion restrictions to the legislation. Still more would prefer a system where subsidies exist, but everyone has to pay something. Of the options proposed so far, something akin to this last solution seems most viable.
Given that nearly 12 million enrollees have never filed a claim—three times as many as before the enhanced subsidies—accusations of fraud and “gaming the system” have risen steadily in recent years. It’s unclear whether that increase is truly due to fraud—though there is evidence that some have signed up without knowing it—or simply a healthier segment of the population choosing coverage.
However, insurance companies receive their premiums either way and have grown tremendously as a result. And when three-quarters of those enrolled can do so for free, the temptation for insurers to abuse that system can be hard to resist.
All of that to say, it seems clear that the current system isn’t working—or, at the very least, has some rather serious bugs—but finding a viable alternative remains elusive. Unfortunately, the temptation to treat symptoms rather than address the real problem is not limited to the government, and our walk with the Lord often suffers for the same reason.
Are you content with your sins?
One of Scripture’s most consistent teachings regarding the nature of sin is that if you don’t address its root cause, no other solution will work. Jesus addresses this tendency in the Sermon on the Mount, where he contrasts the law’s emphasis on right action with the demand to look instead at the motivations behind those actions (Matthew 5). However, the Gospels are hardly alone in preaching this truth.
We see it lived out in the examples of kings like Amaziah, Jotham, and others who worshiped God but failed to tear down the pagan altars throughout Israel. We see it in Paul’s encouragement to surrender our bodies as a living sacrifice to the Lord, dedicating every aspect of our lives and every minute of our day to him (Romans 12:1). And we see it in Christ’s warning to the church in Ephesus, whom he commends for enduring suffering and rooting out false teaching but denounces for abandoning their first love (Revelation 2:2–4).
The temptation to address the symptoms of our sins or to stop short of allowing the Holy Spirit to root out their true cause is often one of the most damaging impediments to a strong relationship with the Lord. Part of the problem is that we can make real progress, but it will never be enough if we find ourselves content with any fragment of that sin remaining in our lives.
So, are there any sins in your life where you’ve stopped short of a true solution? Is there some area where you’re holding back, contenting yourself with minor improvements while knowing the Lord has called you to something more?
Take some time right now to surrender those sins to God. Ask him to forgive you and help you know how to change in whatever ways are necessary to find true freedom in him. And ask him to help you recognize when those temptations return again.
Let’s start today.
Quote of the day:
“The more we let God take us over, the more truly ourselves we become—because he made us.” —C. S. Lewis
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