Congress Failed to Extend the Health Care Subsidies. Now What?

This podcast is supported by the Capital One Quicksilver Card. Earn unlimited 1.5% cash back on every purchase, every day.
Plus, there's no limit to the amount of cash back you can earn.

Whether it's toys for your pet, a tablet to read that book everyone's been talking about, or some new gadgets for the kitchen. Every purchase earns rewards.

Because who couldn't use a little cash back? The Capital One Quicksilver Card. What's in your wallet? Terms apply.
See CapitalOne.com for details.

From the New York Times, I'm Rachel Abrams, and this is the daily.

I don't really pray much,

but

I pray at night that something happened, that I wake up in the morning and I check the news and that a subsidy was extended. Something that will make it not $55,000 next year, something.

This week, Despite a last-ditch effort by some House Republicans to strike a deal on health care, Capitol Hill remains deadlocked on whether to extend support for millions of Americans who get their health care through the Affordable Care Act.

Without subsidies, it would be the minimum of $1,500 a month and what no way. My original estimate was about a 1,200% increase.

I think I was in tears the entire rest of the week after I got that news.

That's left those Americans to confront a wrenching decision. I asked my husband, like, what should we do? He's like, maybe we go without health insurance.
And I was like, oh my God, no way.

Keep paying for rising insurance costs or risk going without it.

That's been a really tough couple of months. A lot of just like mentally preparing for what this next year is going to look like.
And it's pretty grim.

Today, my colleague Marco Sanger-Katz explains who will be most affected and how this could all change the political landscape heading into the midterms.

It's Thursday, December 18th.

Margo, welcome back to The Daily. Thank you so much.
It really feels like healthcare and debates over health insurance have been in the news like every other day almost.

And in large part, that's because there have been these really huge and ongoing and changing debates on Capitol Hill.

But it really feels like this week in particular, we have reached an inflection inflection point, which is why we wanted to have you on the show.

The last time we had you on, it was in the thick of the shutdown fight. And we're bringing you back here so that you can bring us up to speed on where we are now.

So as you may remember, the real crux of the fight over the shutdown was whether or not Congress was going to extend these subsidies that help people buy insurance in the Affordable Care Act marketplaces.

This was the thing that Democrats decided to make the centerpiece of their fight.

And they chose to fight over these subsidies specifically because I think they felt like this was a really strong issue for them. Voters trust them more on healthcare.

It's like one of the Democrats' strongest issues, but it has not been the biggest issue that was in the forefront of people's mind. It was a little bit of a gamble.

You know, were they going to be able to get people to pay attention to this? But they did.

And it didn't work from the perspective of getting legislation passed. They shut down the government for a record period of time.

Ultimately, they decided to reopen the government without legislation to extend these subsidies. Right.
Democrats basically lost that fight.

They agreed to reopen the government with no deal on these health care subsidies. The one deal they got is that they were going to get to put up a vote on the Senate floor.
They did that.

Republicans didn't vote for it. It didn't go anywhere.
So that was all they got was a kind of failed vote on this issue.

And then since then, a lot of Republican lawmakers, particularly moderate Republicans in the House, have been worried about what to do because they know that the loss of these subsidies is going to affect their constituents.

And I think they're worried about political consequences when the midterms roll around. So there's been this kind of deal-making debate between some of these moderate Republicans and Democrats.

Could they form a compromise? Could they pass something that would patch the subsidies and that other Republicans could sign on to?

But the deadline for enrollment came on Monday and they did not pass anything like that. So this is the open enrollment that we're all quite familiar with at this point.

point from the Affordable Care Act. Yeah, I mean, you probably have the same thing for like, we have the same thing here at the Times for our work insurance.

There's some period of time in which you have to pick and pay for your health insurance, and that signs you up for the whole year. And there just are deadlines that happen every year.

So even though we're not at the end of the year now, we're kind of a little bit at the end of the line for these subsidies. People had to make their choices.
Right.

Now, that said, it may not be totally over. This week, something kind of unusual happened.

A couple of moderate Republicans who are really mad at the Speaker of the House for not giving them a chance to vote on this joined up with all of the Democrats to sign what's called a discharge petition, which is a way to get a bill on the floor without the House Speaker's cooperation.

And that bill would extend the subsidies for three years.

But that bill isn't going to come up for a vote for probably a couple of weeks, and it's not clear whether it can pass the Senate.

So for now, it looks like these subsidies are going to expire and a lot of people are going to have to pay more for their health insurance.

So the key word that we have been using a lot here is subsidies, but I want to make sure that people actually understand what that means.

Specifically, what were the subsidies and how are they changing?

So if you will indulge me, I think it makes sense to go back in time a little bit and talk about Obamacare. Definitely.

So when Democrats passed the Affordable Care Act in 2010, they set up a system where people who don't get their insurance through work or through a government program have access to a market.

And if they make less than 400% of the federal poverty level, that's like $63,000.

For a single person, it's like $63,000. For a larger family, you know, might be talking about $100,000.
If you make less than that, you get some help buying your insurance.

And it's on a sort of sliding scale. So the poorer you are, the more help you get.
And the idea was to make insurance affordable for people who didn't have it.

But over time, what a lot of the authors of the Affordable Care Act realized is that the health insurance was still kind of expensive for these people who are uninsured.

So going into the pandemic, there were around 12 million people who were signed up for Obamacare plans. That was less than everyone had expected when the bill passed.

And so when the pandemic happened and there was this real openness to spending more money by the federal government, Democrats revisited those original subsidies and they topped them off with new subsidies that made the payments even more generous and asked people to pay even less of the total bill for their health coverage.

So what did those more generous subsidies look like?

So under the system that Democrats passed during the pandemic, basically

who buys insurance in this market got more financial help. But there are two groups that I think benefited particularly.

One group was the poorest Americans in this market. The way the Affordable Care Act calculates that is anyone who earns less than one and a half times the federal poverty level in a given year.

That's a little less than $25,000 this year. The Democrats reset the subsidies so that those people have to pay nothing.
Nothing, zero. They can get an insurance plan basically for free.

And then there's a new group who actually didn't get any subsidies under the original Obamacare design, who were now under this enhanced subsidy structure getting help for the first time.

So these are people who earn more than 400% of the federal poverty level.

And, you know, this is a group that includes a lot of entrepreneurs, people who work for small businesses that can't offer insurance, farmers and ranchers, and also early retirees who either chose to stop working early before they qualified for Medicare or maybe lost their job and were having trouble getting back into the job market and are living off their savings.

So, basically, it sounds like the Democrats decided that not only did the subsidies need to get more generous, but they also needed to be available to a lot more people.

Well, I think this was a group that a lot of Democrats felt were really slipping between the cracks. And so, I think Democrats were kind of happy to come back and try to fix this program.

And it actually made a very big financial difference for some of these people.

So that's the plan that Democrats implemented in 2021. And at first they made it really short term, but then they immediately saw that tons more people were signing up for coverage.

Do we know who was really driving that surge? What kind of people? What kind of income level? Almost all of this growth is coming from that bottom income category.

So those are the people that are eligible for these zero-dollar premiums. I think there are a couple of reasons why that happened.
One is just that's a group that's much more likely to be uninsured.

If you think about the kinds of jobs that low-income people have, they're just much less likely to come with health insurance.

You know, if there's someone who has a bunch of gig economy jobs that they're patching together or a part-time job, those are the kinds of jobs generally don't have health insurance.

And so those people are really benefiting from the ability to go get a free plan somewhere else. It's also like free is a really important horizon, it turns out.

Even asking people to pay a small amount can really discourage them and particularly low-income people from enrolling in these kind of programs.

A lot of really low-income people don't even have a bank account. And so if you just imagine the mechanics of like, how is that person going to pay a monthly premium?

They can't write a check, they don't have a credit card, not impossible, but it makes it harder. What did Republicans think of all these changes to the Obamacare subsidies?

Well, I think it's important to remember Republicans never liked Obamacare. They felt like it was a waste of money.
They thought it was putting too many rules on the health insurance system.

And this was a huge expansion. It's a lot more dollars.
It was bringing more people into the system. And I think they also objected to some of the specific policy changes.

They really didn't like the idea that all these people were going to get insurance for free. It felt sort of unfair to them.
Everyone else has to pay something for health insurance.

And I think a lot of Republican lawmakers feel like even these very low-income people, if they really value their insurance, they should have to pay some minimal amount just to prove that it's something that they really want and need.

But of course, that didn't matter at the time because the Democrats controlled the entire government. They had the Senate, the House, and the White House.

So when 2022 rolled around, the Democrats decided to extend these more generous subsidies for even longer.

They just weren't able to make them permanent because, as you may remember, Joe Manchin, the conservative Democratic senator from West Virginia, insisted that they not make this a permanent policy.

Democrats chose to have the policy expire in 2025 because they were hoping that they would have enough control in the government that they would be able to eke out a bipartisan compromise to extend the subsidies further.

But of course, that's not what happened. Republicans swept to power in 2024.

And that's why we're now in this situation where the only way that they were able to advocate for this policy was by shutting down the government.

Okay. And so that brings us to this moment where the subsidies are expiring.
No agreement has been reached.

What do we know about the people who would be most impacted by the fact that these are going away?

Basically, everyone in this market is going to be affected to some degree. I said there were around 12 million people in the market before the extra subsidies.

Now there are about 24 million people in the market. So, this low-income group we were just talking about, that's the biggest group.
It's like half the market.

And those people are going to have to go from paying nothing for their insurance to paying somewhere around $50 a month for their insurance.

Then there's this kind of middle-income group, and those people are also going to have to pay more for their insurance, probably somewhere in the neighborhood of like $150 more per month on average.

And then you get to this group earning more than $65,000. And that is a small share of the market.
But in dollar dollar terms, those are the people that are facing the biggest effects.

Some of those people are looking at price increases in the neighborhood of one or even $2,000 more per month without these enhanced subsidies.

Right, because for that group, those highest earners, their subsidies are going away entirely. And so they'll see the biggest potential increase.
Yeah, that's right.

They are looking at just absolutely huge and astronomical price increases that may be impossible for some of them to pay.

So over the last few weeks, as people in all of these income categories have been looking at their options and thinking about the ongoing drama in Washington, I think a lot of them have started to consider some really difficult choices.

Should they buy a less generous plan with a really high deductible so they don't have to pay as much?

Should they try to rearrange their work so maybe they earn less and they get right under that threshold where they could qualify for a subsidy?

Do they need to earn more money, get a second job, or cut back on some of their living expenses in order to be able to pay the premium. And all of that has really come to a head this week.

When the deadline hit, the subsidies were not extended, and people had to ultimately decide what kind of insurance they were going to choose, if any insurance at all.

We'll be right back.

This podcast is supported by 20th Century Studios film, Avatar, Fire and Ash, nominated for two Golden Globes, including Best Cinematic and Box Office Achievement.

See the film critics are saying is bigger and more emotional than ever. Avatar, Fire and Ash, now playing in theaters everywhere and now eligible in all categories for your consideration.

This podcast is supported by the Defending Our Neighbors Fund.

Across the country, immigrants are facing family separation, wrongful detention, and deportation without due process or access to legal support. The Defending Our Neighbors Fund exists to change that.

Powered by people like you, the Defending Our Neighbors Fund is providing access to life-saving legal aid to families in crisis. But they urgently need your help to meet unprecedented demand.

Together, we can defend our neighbors and keep families together. Donate now at defendingourneighbors.org slash donate.
We all have moments when we could have done better. Like cutting your own hair.

Yikes. Or forgetting sunscreen so now you look like a tomato.
Ouch. Could have done better.
Same goes for where you invest. Level up and invest smarter with Schwab.

Get market insights, education, and human help when you need it. Learn more at schwab.com.

Hello.

Good morning, this is Lizzy. Hey, this is Anna from the Times.
How are you doing? All right, I can help you.

Daily producer Anna Foley has been talking to people who get their insurance through the Affordable Care Act marketplace to hear more about how they're navigating the reduction in subsidies.

Why don't you just go ahead and start by telling me a little bit about yourself? I live in Mountain City, Tennessee. I was a

delivery driver for Amazon. I work for a small family business.
I run my daughter's tattoo shop. So I am a small business owner.
Do you like being your own boss?

You know, it suits my personality type. I don't like people telling me what to do.
But honestly, the stressors of things like this, of healthcare, it's gotten really hairy.

It's gotten really, really difficult.

There were truly no good options. Every single plan forced me to compromise on cost, on providers, and on prescriptions, every single one of them.
I have a

rare chronic illness called eosinophilic asthma, and I need to receive a specialty biologic injection every month in order to be able to breathe.

And the copays on that drug alone are $350

a month,

which takes my overall healthcare costs to about $700

a month.

It's a shame that it's a luxury to have air in my lungs.

What are you going to have to change in your life to now cover this healthcare cost? I'm having to make wholesale decisions about my career based on my health insurance.

Like after all these years and all this expertise I've built, Do I go down to Starbucks and just work at Starbucks for benefits and make nothing, but at least I have catastrophic coverage for my family?

I already live a very frugal lifestyle,

so

it's just going to be that on steroids, you know.

More couponing, walking to work instead of driving my car.

Oh, wow. How far is that walk? Three miles.
Oh. That's not nothing.
It isn't nothing, no.

And Christmas this year has already been difficult.

I wanted to give my mom hearing aids for Christmas, but now I've settled on a couple Yankee candles instead.

I also got married this year, but that changes things monetarily, right?

Because if your family household size is one,

you are able to make significantly more

as one person than you are as two people

you know like so when you get married you can only make up to eighty four thousand six hundred dollars to stay under that 400 poverty level so it's like do we just get divorced you know what i mean like it's something we're considering is getting divorced really

yes we're kind of stuck with no option basically without these subsidies so you know thankfully we stay as healthy as we possibly can but you know we're just gonna have to hope for the best and just pay out of pocket as needed so as of right now you don't have health insurance for 2026

correct yeah we only have it through december 31st of this year I've had several family members to say they're hoping they'll get the Congress will get their act together and get something passed to help out.

Otherwise, they're going to have have to drop their insurance.

There are a few things out in the world that I cannot control myself. I'm a total control freak.
I need the government to help in very few situations. The rest, I promise, I will take care of.

This is a blinding bright light where

people need help.

I just feel like I've done everything right my whole life and

I just feel like I've just been sold a bag of shit and now

now what am I gonna do it's like okay

I gotta

really really rethink my future and so it gives me a sense of

loss and bewilderment and

regret

Marco our colleague Anna Foley who's a producer here on The Daily, has been spending a lot of time talking to people who are in the middle of making these really difficult health care choices right now.

And I wonder if you might be able to project forward for us a little bit, like what might this start to look like heading into next year and beyond for these people?

We don't really know for sure.

The Congressional Budget Office, so they're the nerds that help Congress figure out what their laws are going to do, they think that about 2 million more people will become uninsured in 2026 as a result result of this policy and almost 4 million people over the course of the next decade.

But there are other serious analysts who have estimated a much larger impact. Enrollment in the marketplaces has doubled since they put this policy in place in 2021.

So if you think about all of the people who newly became insured in this market, that's 12 million people. And we're kind of snapping back to the policy from before.

And on the one hand, that is really disruptive for the folks who can no longer afford their health care or have to dramatically rethink the health care they they can afford.

But in some ways, it also represents a reversion back to kind of a status quo. And so I'm wondering how you are thinking about the world that we are about to enter.

Yeah, I think Democrats actually have been somewhat misleading in the way that they've been talking about it. They keep acting like the subsidies are going to go away.

And I think that has caused some alarm among some people that all of the subsidies are going away, that people are going to all have to pay the full cost of their health insurance.

And that's not true. What we're reverting back to is the original structure of of Obamacare that Democrats thought really carefully about and wrote and passed in 2010.

So we do know that way more people bought insurance with this extra financial help. It definitely does make a difference in people's lives and it does make a big difference in people's coverage.

But there is a real debate about what level of subsidization is appropriate in these markets and whether and how much people should be asked to pay for their health insurance.

Because in part, over the same period of time in which we've been paying all this extra money to help people buy insurance, the cost of insurance itself has gotten a lot more expensive.

And why is it that health insurance has gotten so expensive over the last few years?

So people love to rag on health insurance companies and no one really likes them. They don't like how expensive they are.
There are lots of other things they don't like about them.

But the reason why health insurance is so expensive is because healthcare in the United States is really expensive and the costs are growing over time. And there are a bunch of reasons for that.

Recently, of course, we've had these GLP-1 anti-obesity medications, super transformative drugs.

They really could help a lot of people improve their health, but they're costly and lots of people want to take them. And that's an example of a much broader trend in the U.S.

healthcare system, which is that we love to use new technology.

When there are new drugs or treatments on the cutting edge that really seem to make a difference in public health, we want to use them, even though they're going to cost a lot of money.

I know you mentioned earlier that in the weeks since the shutdown, Republicans have been trying to get some kind of health care bill together, and now we have this discharge petition.

But I do wonder, as of Wednesday afternoon, what appears to you like the most likely resolution to all of this?

I think it's just really hard to say. We are right in the middle of this debate.

I think what you can see with this discharge petition is that there are some Republicans who are really worried about this issue politically, but you can also see that there are other Republicans who really just don't like Obamacare and don't want to be pouring more money into it.

And they're kind of having this fight within their own party. They control the government, and the Democrats cannot get this policy done by themselves.

And so I think we're just going to have to watch over the next few weeks to see if there's some kind of compromise.

But even if one of these bills comes together in the next few weeks or months, it's still going to be kind of complicated because a lot of people have already picked their plans for the year and they wouldn't have chosen their insurance knowing that these subsidies are coming back.

But I think the most likely scenario is we're kind of just snapping back to this pre-pandemic policy where people do have help buying their insurance, but not nearly as much as they've had in these last few years.

I wonder how we should think about the political pressure that you mentioned, because not only are we heading into a midterm election year, but it was only last year that the head of United Healthcare was shot and killed in the streets.

And people were quite frankly cheering. They were saying that this is what happens when United and all these other insurance companies charge too much.
They're taking advantage of people.

So in terms of the political implications of potentially knocking millions of people off of their health insurance, how does that change the political landscape?

A lot of these people who have benefited from these enhanced subsidies actually don't live in the places that Democrats govern.

They live in states that are controlled by Republicans and that voted for Trump in the last election.

So the biggest increases of enrollment in Obamacare have been in southern states, Texas, Florida, Tennessee, Georgia.

These are real Republican states, and those voters may have something to say if they blame their Republican lawmaker for losing this really really important financial assistance that they were getting, and they might vote them out of office.

But I do think it's important to note this is a relatively small share of the public. We are only talking about 24 million people who are in this market.

And in overall polling, very few Americans are currently ranking healthcare as one of their number one issues going into the next election.

So I think the question is, does the subsidy issue start to function more like a metaphor where it's reminding Americans of their frustrations with the high cost of the healthcare system outside of this small market?

Because healthcare is getting more expensive for everyone. Right.
And of course, there's a much larger conversation happening in this country right now about affordability writ large, right?

Like even beyond healthcare, that is on people's minds. It's certainly on voters' minds.
Sure.

And I think there's a real question about how this issue evolves over the course of the midterm election as Americans hear more and more stories like this from their neighbors and their family members and their friends.

Margo Sanger Katz, thank you so much for joining us. Thanks for having me on.

We'll be right back.

We all have moments when we could have done better, like cutting your own hair, yikes, or forgetting sunscreen so so now you look like a tomato. Ouch.
Could have done better.

Same goes for where you invest. Level up and invest smarter with Schwab.
Get market insights, education, and human help when you need it. Learn more at schwab.com.

Support for this podcast comes from GoodRX. The holidays are here, but so is cold and flu season.
Find relief for less with GoodRX.

You could save an average of $53 on flu treatments, plus save save on cold medications, decongestants, and more. Easily compare prescription prices and find discounts up to 80%.

GoodRX is not insurance, but works with or without it and could beat your copay price. Save on cold and flu prescriptions this holiday season at goodrx.com slash the daily.

If you're overextended and understaffed, Upwork Business Plus helps you bring in top quality freelancers fast. Get instant access to the top 1% of talent on Upwork in marketing, design, AI, and more.

Ready to jump in and take work off your plate. Right now, when you spend $1,000 on Upwork Business Plus, you'll get $500 in credit.

Go to upwork.com slash save now and claim the offer before December 31st, 2025. Again, that's upwork.com slash S-A-V-E.
Scale smarter with top talent and $500 in credit. Terms and conditions apply.

Here's what else you need to know today.

Dan Bongino, the number two official at the FBI, said on Wednesday that he would step down next month, bringing an end to his brief but tumultuous stint at the Bureau, where he was known for his volcanic temper, missteps, and hyperactive presence on social media.

The upheaval comes at a precarious moment for the Bureau and for the White House.

President Trump and his appointees, see the FBI, which long operated independently of White House interference, is a critical part of his retribution agenda.

And

Warner Brothers Discovery went on the attack on Wednesday against the attempted hostile takeover of the company by Paramount.

Warner Brothers Discovery urged its shareholders to reject Paramount's offer and said that Paramount's owners, the billionaire father-son duo Larry and David Ellison, have, quote, consistently misled them.

The Ellisons are determined to outmaneuver Netflix, which reached a deal to buy a large portion of Warner Brothers' business earlier this month.

Today's episode was produced by Anna Foley, Olivia Nat, Stella Tan, and Diana Wynne, with reporting from Anna Foley.

It was edited by Rob Zipko, contains music by Diane Wong, Alicia Bai Chu, Marion Lozano, and Pat McCusker, and was engineered by Alyssa Moxley.

That's it for the daily. I'm Rachel Abrams.
See you tomorrow.

We all have moments when we could have done better. Like cutting your own hair.
Yikes. Or forgetting sunscreen so now you look like a tomato.
Ouch. Coulda done better.
Same goes for where you invest.

Level up and invest smarter with Schwab. Get market insights, education, and human help when you need it.
Learn more at schwab.com.