Obamacare Open Enrollment Brings Election Day “Gift” To Voters

We’re about a week away from two notable dates on America’s civic calendar. On November 1, open enrollment begins on Obamacare’s health insurance exchanges. One week later, voters head to the polls for the midterm elections.

Democrats have been aware of this reality for months. It was one of the reasons they made a mad dash to pass the dubiously named Inflation Reduction Act, which President Biden signed into law back in August. That law provides generous subsidies to people shopping for health insurance on the exchanges. Without it, consumers would’ve seen big premium spikes days before casting their ballots—not something Democrats running for Congress wanted.

Those subsidies will end up costing taxpayers billions of dollars—and do nothing to make the underlying cost of health coverage more affordable.

In Obamacare’s first six years, average individual premiums more than doubled. A Kaiser Family Foundation study forecasts a median increase of an additional 10% in 2023.

Premiums have steadily increased because of Obamacare’s many mandates. The law requires insurers to sell policies to all comers, regardless of health status or history. It limits premiums for older people at three times what younger people pay, even though older people are much costlier to insure. And it mandates coverage of ten essential health benefits, including substance abuse treatment and mental health services, regardless of whether consumers want or need them.

Rather than relax these cost-inflating mandates, Democrats have chosen to socialize premium hikes by increasing taxpayer subsidies.

Last year, as part of the American Rescue Plan Act, Democrats reduced the amount that people who made less than four times the poverty level—$111,000 for a family of four in 2022—had to pay for premiums as a percentage of income. And they capped premiums at 8.5% of income for those who made more than four times the poverty level. Previously, these well-off Americans were ineligible for federal assistance with their premiums.

The cost of this expansion this year is roughly $30 billion—on top of the $60 billion the government is spending on subsidies under Obamacare’s original terms.

This more generous subsidy scheme was supposed to expire at the end of 2022. The Inflation Reduction Act put off the day of reckoning until December 31, 2025, at a projected cost of roughly $25 billion per year.

Had the subsidies lapsed, an estimated 3 million Americans would have been priced out of the healthcare market, the Biden administration claims. Another 1.5 million would have seen their annual premiums jump $3,000, and 9 million others would have faced increases of $400 per person.

That’s not exactly the last impression Democrats wanted to leave with voters before the midterms.

If the past is any indication, the scheme of more generous subsidies will convince more people to sign up for Obamacare this fall. Last year, exchange enrollment jumped 17% relative to the 2020 open enrollment period—when the bigger subsidies were not yet in effect.

Democrats see higher enrollment figures as evidence of the exchanges’ success. But they really just tell us that people are happy to buy something when someone else is paying the bill. Last year, about nine in 10 exchange enrollees received subsidies.

Many of the people who have taken advantage of the newly generous subsidies were not previously uninsured. Three-quarters swapped their individual or employer-sponsored coverage for the new federally subsidized offering. That trend may continue this open enrollment season.

Last year, Obamacare sign-ups hit a record. The Biden administration is no doubt hoping for another one this year. And it doesn’t care if it has to spend tens of billions of taxpayer dollars to get it.