Then-Democratic U.S. presidential contender Joe Biden speaks about the Affordable Care Act (ACA) at the Queens Theatre in Delaware on Oct. 28, 2020.
After President Joe Biden’s $1.9 trillion bailout bill was approved in the House of Representatives, Senate Democrats are trying to get it passed by mid-March, with a vote expected as soon as this weekend. But the two parties remain divided on some details of the bill.
Now, some senators have criticized the bill for burying subsidies that expand Obamacare and would significantly subsidize wealthy families hit the least by the Epidemic, estimated to receive amounts in the thousands of dollars.
Democrats plan to give more people access to Affordable Care Act (ACA) premium subsidies by the end of 2022. It also expands the amount of subsidies for those who currently qualify.
Brian Blase, a senior fellow at the Galen Institute and a special assistant to former President Trump‘s National Economic Council, said the relief bill’s revised Medicare provisions would result in significantly higher subsidies for seniors and people with higher incomes.
Blase wrote in a report that the proposed changes in the plan “recklessly increase federal subsidies for Medicare, thereby exacerbating tax inequities, substantially replacing private spending with government spending, reducing (people’s) incentive to work, decreasing productivity, and significantly increasing health care spending for already hard-pressed families and governments. “
He estimated that a Family of four headed by a 60-year-old with an annual income of $159,000 would receive about $15,868 per year under the Democratic proposal.
Biden’s bailout bill would make Obamacare subsidies available to more people by removing the income cap on subsidy eligibility. Currently, subsidies are only available to people with incomes below 400 percent of the federal poverty level, or $51,520 per year for an individual and $106,000 for a family of four.
The bill also reduces the maximum premium payment for individual benchmark coverage from 10 percent of income to 8.5 percent.
According to a report by the Kaiser Family Foundation, the elimination of the “subsidy cliff” would benefit people living in high premium states. The report notes that 60-year-olds living in Wyoming, West Virginia, South Dakota, Nebraska, Connecticut and Alabama with incomes of $55,000 could save more than 70 percent on their premiums.
Because Obamacare premiums rise with age, most of the benefits of this change (in the Medicare-related changes to the bailout) will accrue to families in their 50s and 60s, who tend to be at peak earning years and have considerable savings.”
Senate Republican Leader Mitch McConnell (R-Ky.) said on the floor on Feb. 2 that the new subsidy enhancements would “disproportionately benefit the wealthier.
House Speaker Nancy Pelosi (D-Calif.) countered that the provision would allow people in the next income tier to receive subsidies temporarily. “It’s not about wealth,” Pelosi said. “They shouldn’t be complaining that some people make a little bit more money and get subsidies.” She also rebuked the Republicans’ Tax Cuts and Jobs Act of 2017, saying it disproportionately benefits the wealthy.
The Senate is expected to vote on the bailout bill this week, and on the afternoon of March 4, Vice President Hercule broke a 50-50 tie with one “yes” vote, pushing the Senate to begin debate. The Congressional Budget Office estimates that the proposed two-year expansion of Obamacare subsidies would cost the U.S. Treasury about $34.2 billion.
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