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Biden’s Health Insurance Plan Would Grow The Deficit By $335 Billion In 10 Years

Staff Writer

Top Points:

  1. Increased Deficit: Biden's health insurance plan would extend "temporary" Obamacare subsidies, increasing the federal deficit by $335 billion over the next decade, plus an additional $48.3 billion in interest costs.

  2. Employer Coverage Drop: The Congressional Budget Office (CBO) estimates a 3.5 million decrease in enrollment in employment-based coverage if the subsidies are extended, as more employers would drop health insurance offerings, affecting millions of Americans who currently rely on employer-provided plans.

  3. Subsidies for Wealthy and Illegal Immigrants: The plan removes the income-based cap on subsidy eligibility, resulting in $6.9 billion spent on subsidies for affluent households and an additional $9 billion on subsidies for DACA recipients, diverting funds from those truly in need.


Full Report:

Joe Biden is once again targeting millions of Americans' health coverage with his latest proposals.


Back in 2008, Barack Obama secured the presidency by promising that under his health care plan, "If you like your plan, you can keep it." This claim was later dubbed the "Lie of the Year" by Politifact in 2013. Fast forward over a decade, and Biden's new proposals threaten to disrupt health coverage for millions once more. The Democrats' plan to extend a "temporary" increase in Obamacare subsidies will not only lead to massive federal spending but also destabilize the insurance system most Americans rely on.


Employers Dropping Coverage

Just before Independence Day, the Congressional Budget Office (CBO) released a detailed estimate on the cost of extending increased Obamacare subsidies. Initially introduced in Democrats' 2021 partisan "stimulus" bill and extended for three years in 2022, these subsidies are set to expire at the end of 2025—coinciding with the expiration of many provisions of the 2017 Trump tax relief package.


The CBO found that extending these subsidies would result in a "3.5 million decrease in enrollment in employment-based coverage." This drop would be even larger if the subsidy extension became permanent, as more employers would reconsider offering health insurance. In simple terms, if you like your current health plan, you might lose it due to your employer canceling it.


Moreover, the CBO noted that while extending the subsidies would increase the number of insured Americans by 3.4 million, this is less than the 3.5 million who would lose their employer-based coverage. This indicates an inefficient government spending strategy where more people who already had insurance would receive subsidies rather than increasing the overall number of insured individuals.


Welfare for the Wealthy and Illegal Immigrants

The rise in employers dropping coverage is partly due to Biden's removal of the income-based cap on subsidy eligibility. Prior to 2021, only households earning less than four times the poverty level ($124,800 for a family of four) qualified for subsidies. Removing this cap now allows even affluent workers to qualify for subsidized policies, making it easier for employers to eliminate coverage.


The CBO analysis supports this, predicting that if subsidies become permanent, the federal government will spend $6.9 billion over the next decade on insurance subsidies for households earning more than 750 percent of the poverty level. This year, that threshold is $112,950 for an individual and $234,000 for a family of four. Such households, far from being low-income, should not qualify for these subsidies.


Additionally, Biden's plan benefits illegal immigrants. The CBO also estimated the cost of allowing Deferred Action for Childhood Arrivals (DACA) recipients to qualify for subsidies, a policy that will cost $9 billion over the next decade, plus an additional $1.6 billion in interest costs.


Congress: Just Say No!

In total, the CBO concluded that making these "temporary" subsidies permanent would increase the deficit by $335 billion over the next decade, with an additional $48.3 billion in interest costs. This policy would spend billions subsidizing people who already had health insurance.


Recent reports have also highlighted potential fraud, with data suggesting that recipients are lying about their income to qualify for "free" insurance. The Democrats' 2021 subsidy increases created these "premium-free" policies, and eliminating the increased subsidies as scheduled next year would remove this fraud incentive.


With our national debt nearing $35 trillion, Congress has countless reasons to reject an extension of these Obamacare subsidies. Lawmakers must come to their senses and stop spending money we don't have.


Original Story by Christopher Jacobs, The Federalist

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