Senate blocks Obamacare tax subsidy extension, all but ensuring spikes for Wyoming consumers

U.S. senators voted down dueling health insurance measures Thursday, including a Democratic proposal to extend Obamacare tax subsidies. That failure all but ensures costs will spike for millions of Americans — including thousands of Wyoming customers who will experience the highest increases in the country. 

Wyoming Sen. John Barrasso, the Senate Majority Whip and a retired doctor, has emerged as a spokesperson for the Republicans’ measure and a major foe of the Democratic proposal. He skewered Obamacare as a failure and said the government cannot keep spending money to prop up the unsustainable program. 

“What [the Democrats] are proposing isn’t a serious plan,” Barrasso said on the U.S. Senate floor. “It’s a disaster. Our nation can’t afford it. The American people can’t afford to pay these high costs for health care. We need to focus on the cost of care.”

Wyoming’s other senator, Republican Cynthia Lummis, also voted against subsidy extensions. 

Consumers and health care advocates have been working for months to try to avoid the year-end subsidy expiration. But with signs pointing to their likely end, many have been bracing for the cost increases and scrambling to figure out if they can afford them. 

In Wyoming, a 60-year-old person earning roughly $63,000 is facing a 421% increase in average monthly premium costs on the ACA marketplace, according to reporting by KFF, a nonprofit that writes about health care. No other state equals or tops that percentage. The same individual would face increases of 231%, 166%, 192% and 134% if he or she lived in Montana, Colorado, Utah and Idaho, respectively.

Not all of the 45,000 ACA customers in Wyoming will experience such dramatic rises; costs depend on factors like age and annual income. But health care advocates worry that sticker shock will cause consumers to either find private plans with cheap price tags but lousy coverage or abandon insurance altogether. That could raise costs for hospitals tasked with providing uncompensated care and even for those with insurance.

How we got here

The Affordable Care Act marketplace, created in 2010, is available to people who don’t qualify for Medicaid and don’t have insurance through an employer. 

In 2020, Congress created the Enhanced Premium Tax Credit during the COVID-19 pandemic to make marketplace insurance more affordable. That program provided subsidies that drastically reduced premium costs. For some low-income customers, monthly premiums went to $0.  

The program helped contribute to an all-time low in America’s uninsured rate, health advocates say. But the tax credits were not cheap — and fiscal conservatives argued they were unsustainable. Congress extended the credits in 2022, but did not extend them again this year. A deadlock over the tax credits played a significant role in this fall’s historic government shutdown. 

Expansion would result in a $212 billion deficit on government spending over 10 years, according to a 2020 estimate from the Congressional Budget Office.

On Nov. 12, Congress struck a deal to reopen the government that did not include an extension. But both Democrats and Republicans vowed to continue working on bills to address expiring ACA subsidies, leading to Thursday’s votes. The Democrats’ measure would have extended the subsidies, while Republicans proposed shifting funds to Health Savings Accounts, or HSAs. 

What they are saying 

Senators echoed many of the arguments that have shaped the debate, with Republicans arguing the subsidies were a one-time attempt to fix the broken system of Obamacare, and Democrats arguing the subsidies are necessary to make health care affordable and save lives. 

“This is not a political fight,” said Democratic Sen. Chuck Schumer of New York. “This is not a symbolic vote. This is a life and death vote, because people who will lose their health care could face that horrible, horrible end.”

Schumer also stressed that while Democrats were unanimous in their support, Republicans had fractured. 

“Democrats are fighting to lower the health care costs for the American people, while Republicans are fighting among themselves,” he said. “By my last count, Republicans are now at nine different health care proposals and counting, and none of them give the American people the one thing they most want — a clean, simple extension of these health care tax credits.”

Barrasso, meanwhile, asserted that Obamacare “robbed the American people of choice as well as affordability,” and Democrats were attempting to use taxpayer dollars to hide the fraud-ridden program’s failures. He also noted that when the subsidies were created in 2021, Democrats characterized them as “temporary, emergency measures because of COVID.

“Now these tax-and-spend radicals who run the Democratic Party want to extend them again, these bonus payments, for another three years,” he said. “And they want to do it with zero reforms.”  

What next?

Wyoming’s health costs have seen additional inflationary pressures this year. In addition to baseline insurance plan cost increases, Mountain Health Co-op stopped offering health plans in Wyoming. That means the state is down to just two providers.

The deadline to enroll in an ACA marketplace plan starting Jan. 1 is Dec. 15. If customers enroll between Dec. 15 and the closing date of Jan. 15, coverage will start Feb. 1. 

Those who do not want to continue ACA policies need to be careful they don’t let them auto-renew, health insurance navigators say. And for people exploring private insurance, experts recommend calling insurance companies directly, fully understanding plan provisions before purchasing and being careful with online plans that look too good to be true.