With health insurance costs poised to spike for more than a half-million Ohioans, U.S. Sen. Jon Husted offered a compromise. It consists mostly of raising costs or cutting benefits for low and middle-income consumers whose pay and insurance plans aren’t as good as his own.
The 43-day government shutdown that ended Nov. 13 was primarily over subsidies created in 2021 to help people purchase health insurance on exchanges created by the Affordable Care Act.
They’re set to expire in less than three weeks, which would cause premiums to more than double on average for nearly 600,000 Ohioans and 23 million Americans.
With the country mired in an affordability crisis, large majorities of Americans want to see the subsidies extended.
Congressional Democrats refused to sign on to a spending bill reopening the government unless Republicans agreed to such an extension.
The impasse was broken when a small group of Democrats in the Senate agreed to support a spending bill in exchange for a promise from Senate Majority Leader John Thune, R-S.D. He said he would bring an extension to a vote before the subsidies expire.
A vote on a three-year extension is expected this week. But it’s likely to fail amid Republican opposition.
That leaves the GOP with a political imperative to come up with an alternative.
On Nov. 20, Husted took to the Senate floor to offer his.
Formerly Ohio’s lieutenant governor, he was appointed to fill the seat vacated by JD Vance when Vance assumed the vice presidency in January.
Husted has to run for his Senate seat next November, and affordable health care is likely to be a big issue.
Husted has been highly critical of the ACA subsidies, which are credited with helping to bring down the rate of uninsured Americans to an all-time low. He voted repeatedly against extending them.
In his Nov. 20 floor speech, Husted called them, “Another $350 billion on the national credit card for a program that we know is dysfunctional.”
He was citing the estimated cost over 10 years if the insurance subsidies are made permanent, according to the Congressional Budget Office.
Husted’s office didn’t respond last week when asked why he was against extending that program as is, while he was OK with voting last summer for President Donald Trump’s One Big Beautiful Bill Act.
That law extended the 2017 Trump tax cuts, providing a $1 trillion windfall to the richest 1% of Americans over the coming decade. It also cut nearly $1 trillion from Medicaid, the federal health program for the poor, and another $186 billion in federal food assistance.
Even though it slashes programs for the needy, the law Husted voted for still adds $3.4 trillion to the deficit, according to the Bipartisan Policy Center.
About 64% of Americans now view the Affordable Care Act — or Obamacare — favorably. But as with many Republican officials, Husted still doesn’t like it.
“I wasn’t here when Congress passed Obamacare or the Biden covid subsidies that have been used to prop up the ACA exchanges, but I want to be part of the solution,” he said. “Didn’t create the problem, but I’m here to be part of the solution.”
To do so, he proposed a “fraud, freeze and fix approach.”
Most pertinent to Ohioans who get their insurance on the ACA exchanges is the “freeze” portion of the formula.
“We need to freeze the subsidies to where they are right now, so it doesn’t become a growing burden for the American taxpayer,” Husted said.
The freeze would fall on people using the exchanges. They would either see their costs go up with health-sector inflation, or some would be locked out of the program.
The subsidies in 2024 saved the average recipient about $700 a year, but savings can be nearly $20,000 for some households.
If the ACA subsidies are allowed to expire, marketplace recipients will lose those savings.
That would create large numbers of uninsured people who would still get sick, but couldn’t pay for their care — a matter Husted didn’t discuss.
Taking away insurance from an estimated 4 million Americans, the Trump law Husted supported is expected to force health care costs even higher, the University of California at Berkeley reported in July.
If subsidies are frozen as Husted proposes, marketplace participants will also lose, just not as much.
According to the Committee for a Responsible Federal Budget, the cost of the subsidies has risen from about $92 billion in 2023 to an estimated $138 billion this year.
At the same time, enrollment has grown from 16 million Americans to an estimated 23 million over the same period.
In other words the patient base has grown about 44% since 2023, while costs have grown about 50%.
Freezing the amount spent on the program would require some mix of reducing eligibility and increasing participants’ costs.
As for the “fraud” piece of his proposal, Husted cited pandemic-era abuses in which brokers fraudulently enrolled people or changed their coverage without their permission.
His solution is to make people using the “Bronze” — or lowest — tier of coverage with no premiums to pay at least a token amount.
“Requiring everyone receiving a premium tax credit to pay a small amount — at least a small amount — toward their health care insurance will help realign the incentives and reduce fraud,” he said.
“It will make certain that Americans cannot be enrolled in plans without their knowledge and consent.”
However, he didn’t note that those plans carry high deductibles and often coinsurance, which requires patients to pay a percentage of the cost of treatment.
So people using bronze plans usually end up paying more for care than others on the ACA exchanges.
In addition, the Commonwealth Fund reported, safeguards implemented last year appear to be helping to solve the problem with fraud.
“Following implementation of this safeguard, broker-initiated plan changes dropped nearly 70% and changes that redirect a commission from a consumer’s original broker to a new one — an indicator of potential misconduct — fell almost 90%,” it said.
Husted also complained about costs associated with the marketplace’s midlevel, or “Silver” plan.
The way the subsidies work, people with the least money are incentivized to participate in those plans.
Overall, nearly 60% of people using the ACA exchanges buy Silver plans.
Husted called the incentives “Silver loading” and charged that it improperly inflates expenses.
“It supercharged the federal subsidy spending,” he said. “It created a system that got gamed.”
But is it fair to imply that it’s somehow a scam to encourage people to use plans that cover 70% of “actuarial value” — the amount of medical expenses a person is likely to have?
The bronze plans cover just 60% of actuarial value and, if they include coinsurance, can expose people to catastrophic expenses.
Meanwhile, according to Physicians for a National Health Program, Husted and his colleagues enjoy much better plans, compliments of the taxpayers.
Physicians and Students for a National Health Program is a group of 20,000 doctors and medical students who advocate for a single-payer system such as those in other developed countries.
They pay far less per person for health care and have far better outcomes.
It said congressional plans cover 80% of actuarial value, while “the 60% to 70% actuarial value plans for the general public (on the ACA exchanges) are considered to be underinsurance — plans that do not provide adequate financial security in the face of medical need.”
There’s also the issue of relative income. As a senator, Husted makes $175,000 a year.
About 70% of the people using the ACA exchanges make 250% or less of federal poverty guidelines.
For a family of four, that’s $80,375 a year, or a little more than half of what Husted makes.
Husted did advocate three reforms that have considerable support in health policy circles:
- Price transparency so patients and health plans can be informed shoppers
- Reform of the opaque practices of middlemen known as pharmacy benefit managers, or PBMs. The biggest three are owned by giant health conglomerates and control nearly 80% of the marketplace. They’re suspected of driving up drug prices through anticompetitive practices.
- Reform of the 340B program. Designed to subsidize care for the poor, the cost has exploded. And a lack of regulations has allowed hospitals to draw funds even as they use of that money to pay lavish salaries and buy things like stadium-naming rights.
“It will drive down the actual cost of health care,” Husted said of the reforms.
This story was originally published by the Ohio Capital Journal and republished here with permission.