The Democrats passed the $1.9 trillion spending spree known as the “American Rescue Plan Act” in March 2021. The plan offered something for everyone, with even more generous subsidies for those who purchased insurance through Obamacare.
The ARPA expands eligibility for ACA insurance subsidies for people who buy their own health coverage and increases financial assistance for those with lower incomes.
Joe Biden was proud of himself. The Act’s Obamacare provisions will expire on December 31, 2022. Just as midterm elections are approaching, people will receive notices that their insurance premiums will rise rapidly.
Politico: This has alarmed vulnerable lawmakers and White House allies. In recent weeks, senior Democrats privately warned that the issue could cost Democrats control over the Senate and destroy their hard-earned reputation for being the party of healthcare.
According to polling, health care affordability is ranked second to inflation by voters. Biden’s American Rescue Plan, which included enhanced subsidies last March, has also driven Obamacare signups to new heights. This year, 2.5 million people were added to the program.
The (Don’t call it) Build Back Better bill is the solution to the Democrats’ dilemma. The problem is still Senator Joe Manchin who thinks the bill is too costly in an era of rising inflation.
It is expected that maintaining the subsidies will cost several hundred billion dollars each year. The Republicans are opposed to the continuation of the subsidies, so tucking an extension in the broader partisan bill may be the only option left before the midterms.
This adds yet another dimension to the negotiations between Manchin and Democratic leaders, which have so far been focused on three areas: climate provisions and drug pricing.
Three people familiar with the matter stated that staffers for Manchin, Senate Majority Leader Chuck Schumer, and their colleagues have been exchanging ideas about the structure of a bill over the past few weeks. Although there are no guarantees that an agreement will be reached before Memorial Day, the discussions have raised hopes that one is possible.
Manchin will be back. Manchin doesn’t want his party to lose its chances in 2022 and 2024, so he will approve climate change legislation as well as drug pricing.
Manchin won’t likely sign on to the Obamacare subsidy plan. It would increase the deficit too much and boost inflation, already high.
Any political benefit Biden may get from the revised reconciliation bill won’t save Democrats in 2022, and it won’t matter until 2024.