Proposed Legislation to Revamp Obamacare Subsidies

Senators Bernie Moreno from Ohio and Susan Collins from Maine introduced a new bill on Monday aimed at extending and reforming the soon-to-expire enhanced subsidies from the Affordable Care Act.

Moreno criticized the origins of the ACA, stating, “Barack Obama and the Democratic Party created this disaster to line the pockets of giant insurance companies while healthcare costs for ordinary Americans skyrocketed. But I refuse to make the American people pay the price for Democratic Party incompetence. I am willing to work with anyone to ultimately reduce costs for all Americans, and I hope my colleagues across the aisle will do the same.”

The newly proposed legislation is known as the Consumer Affordability and Responsibility (CARE) Act. It aims to extend enhanced insurance premium deductions as well as Obamacare subsidies for another two years while implementing key reforms to the existing deductible system.

During the Biden administration, the Advanced Premium Tax Credit (APTC) was strengthened through a significant $1.9 trillion COVID-19 stimulus package, officially called the American Rescue Plan. These credits were further backed by the Inflation Control Act.

The CARE Act provides a two-year transitional period, easing the phase-out of subsidies for individuals earning over $200,000 annually. Moreno’s office notes that premium tax credits should be means-tested because “wealthy Americans don’t need Uncle Sam’s help to buy insurance.”

Additionally, the bill aims to eliminate $0 premium plans. Instead, it mandates a minimum payment plan of $25 per month to ensure widespread participation and to discourage fraud that often accompanies no-cost premium options.

Collins expressed concern over the financial challenges faced by families, saying, “Families in Maine and across the country are struggling with high health care costs. We must pursue practical solutions that increase affordability without creating sudden disruptions to insurance coverage. By extending health insurance premium caps, this bill will help prevent health insurance premium increases that many families cannot afford.”

This proposed legislation follows a report by the General Accounting Office (GAO), which revealed extensive fraud linked to Obamacare subsidies. Their findings indicated that approximately 58,000 Social Security numbers tied to APTC applications matched with data from the Social Security Administration indicating death, and that $94 million in APTC was transferred to health insurance companies on behalf of deceased individuals.

Jordan, commenting on the GAO report, lamented, “For years, we were told we would keep our plans, we would keep our doctors, and our premiums would go down. None of that happened. This new report confirms what we already knew: Under Obamacare, hardworking Americans will… Fraud benefited insurance companies while insurance premiums soared and health care options shrunk. Obamacare was built on lies and broken promises that hurt families and drove up costs.”