Neither Republicans nor Democrats are telling the truth.
Big Price Hikes Coming
Even if there’s a deal, to end the shutdown, big price hikes are coming.
The Wall Street Journal explains What to Know About Signing Up for ACA Health Plans as Rates Rise
For around 24 million people enrolled in Affordable Care Act plans, things are about to get crazy.
Enrollment for next year’s coverage starts Saturday, and virtually everything is changing all at once. Premiums for many plans are shooting upward. The federal subsidies that most enrollees use to pay for their insurance are set to shrink, though Congress might still reverse that in coming weeks. New rules will add additional wrinkles, including the risk of higher tax bills.
The upshot: If you have Obamacare, you really need to dig in and be careful about what you choose during the open enrollment period, which begins Saturday and lasts until Dec. 15, for coverage that starts Jan. 1.
If you don’t, you could get hit with huge bills next year. You could also be locked into health insurance you can’t afford.
“This is the most extreme pricing change we’ve seen,” said Jeff Grant, a former official with the Centers for Medicare and Medicaid Services, which oversees federal ACA implementation. “Nobody can understand what this means until they go shop.”
Many Obamacare insurance premium hikes for next year are well into double-digit percentages. Most enrollees don’t pay the full premium, but declining federal subsidies will still leave them with far higher monthly bills.
The pain will be spread unevenly. Its impact will depend on factors like your income level, your age and what plans are sold in your area.
Some of the biggest increases, in dollar terms, will hit people who make slightly over 400% of the federal poverty level, which is about $62,600 for an individual. Many of those people qualified for a subsidy this year, but they won’t get any help at all next year because enhanced federal payments are set to lapse.
Premiums More Than Double
Since 2014, the ACA has capped how much subsidized enrollees pay for their health insurance premiums at a certain percent of their income, on a sliding scale, with the federal government covering the remainder in the form of a tax credit. Enhanced tax credits work by further lowering the share of income ACA Marketplace enrollees pay for a plan. For example, with the enhanced tax credits in place, an individual making $28,000 will pay no more than around 1% ($325) of their annual income towards a benchmark plan. If the enhanced tax credits expire, this same individual would pay nearly 6% of their income ($1,562 annually) towards a benchmark plan in 2026. In other words, if the enhanced tax credits expire, this individual would experience an increase of $1,238 in their annual premium payments net of the tax credit.
insurers in the ACA Marketplace are proposing to raise their rates by a median of 18%. Fueled by rising health care costs and the expiration of the enhanced premium tax credits, insurers are proposing the largest rate increases in 2026 since 2018, the last time uncertainty over federal policy changes contributed to sharp premium increases. As premiums increase, the enhanced tax credits provide additional savings to enrollees that receive them. This means that middle-income enrollees, whose payment for a benchmark plan is currently capped at 8.5% of their income and will lose financial assistance altogether, will have to cover the cost of premium increases in addition to the amount their tax credits would have previously covered to keep their same plan.
Enrollees with incomes above 400% of poverty will be subject to large increases in premium payments if enhanced premium tax credits expire. On average, a 60-year-old couple making $85,000 (or 402% FPL) would see yearly premium payments rise by over $22,600 in 2026, after accounting for an annual premium increase of 18%. This would bring the cost of a benchmark plan to about a quarter of this couple’s annual income, up from 8.5%. Meanwhile, a 45-year-old earning $20,000 (or 128% FPL) in a non-Medicaid expansion state would see their premium payments for a benchmark plan rise from $0 to $420 per year, on average, from the loss of enhanced premium tax credits. About half (45%) of ACA Marketplace enrollees have incomes between 100-150% of poverty, about a fourth (28%) have incomes between 150-250% of poverty, and roughly 1 in 10 have incomes above 400% of poverty.
Funding SNAP
The New York Times reports Government Ordered to Pay Food Stamp Benefits During Shutdown
A federal judge ordered the Trump administration on Friday to continue paying for food stamps during the government shutdown, siding with local officials and nonprofits that had sought to spare millions of low-income Americans from losing benefits in a matter of days.
It was the second of two rulings in the span of about an hour that found the administration had acted unlawfully, after it had refused to tap an emergency reserve — enacted by Congress and totaling in the billions of dollars — to sustain the nation’s largest anti-hunger program.
But it remained unclear if or when food stamps would actually reach the roughly 42 million people who rely on monthly federal help to purchase groceries. Taking to social media, President Trump said late Friday that his administration would release the funds only once it received “appropriate legal direction” from the court, as he warned that any food stamp benefits paid in November would “unfortunately be delayed.”
The emergency funds alone are enough to provide only partial benefits, according to federal officials, raising the odds of another financial cliff for millions of low-income Americans unless Congress can quickly devise an end to the current stalemate.
The twin court defeats nonetheless amounted to a major rebuke of the White House. For days, Mr. Trump’s leading deputies had maintained that they could do little to save the Supplemental Nutrition Assistance Program, known as SNAP, despite the fact that they had access to emergency reserves — and had already moved around billions of dollars to sustain other functions of government while federal funding had lapsed.
A spokesman for the Justice Department declined to comment, and a spokeswoman for the White House budget office did not respond to a request.
Roughly one in eight Americans are enrolled in SNAP, which was set to run out of money beginning Saturday in a calamity that would have exacted a substantial economic toll on communities nationwide.
The Agriculture Department initially said it would use the money, which totals about $5 billion, if the government remained closed for an extended time. But the agency reversed its publicly stated policy in late October, saying that it could not legally drain the available reserves except in response to natural disasters. That created a November funding cliff for the program.
At one point during the hearing, Tyler Becker, a lawyer for the Justice Department, argued on Friday that the shutdown was “not an emergency,” even though roughly 42 million people were at risk of losing benefits imminently.
“If we are given the appropriate legal direction by the Court, it will BE MY HONOR to provide the funding, just like I did with Military and Law Enforcement Pay,” added Mr. Trump, referring to his earlier actions to shift billions in funding to pay workers who normally would not have received checks during the shutdown.
Q&A on Obamacare and SNAP
Q: Do Democrats want to fund illegal aliens?
A: Of course they do, but please keep reading.
Q: Is the shutdown about funding for illegal aliens?
A: No. That’s a Republican excuse. If that was what the shutdown was about, it would be over already. Republicans and Democrats would work out a solution. They are not even talking.
Q: Are both sides lying?
A: Yes, as is typically the case.
Q: What’s this really about?
A: Democrats extended subsidies to those making up to 400 percent of the poverty level. They want to keep those subsidies. Illegal aliens are a side show.
Q: Why are benefits expiring this year?
A: Blame the Democrats. To make Biden’s budget look reasonable, it was the Democrats who set this year as the expiration.
Q: Please explain.
A: Budgets are 10-year processes. Both sides play games by pretending their handouts will expire. That way they get to avoid 10-year accounting, treating things as temporary. Trump’s first term Tax Cuts and Jobs Act was set to expire next year as well. But it didn’t. The budget deficit increase was massive.
Q: Did Republicans claim the deficit did not rise due to extending the TCJA?
A: Of course. It’s a big lie.
Q: If Democrats were in power now would they make the same claim about Obamacare subsides?
A: Of course
Q: What does SNAP have to do with this?
A: Trump tried to shut off all SNAP benefits to pressure Democrats into passing a clean continuing resolution to fund the government?
Q: Can Trump shut off all SNAP funding?
A: No, but he tried to anyway by shutting off the emergency SNAP funding pool.
Q: If the emergency pool runs out, will SNAP benefits cease?
A: Yes
Q: Who will get the blame for this?
A: Republicans think Democrats will get the blame. Democrats think Republicans will get the blame.
Q: Who has the better case?
A: In the blame game, Democrats will come out ahead. In the case for reducing spending, Republicans have the better case.
Q: Won’t Republicans increase the deficit in other places?
A: Of course. Look no further than Trump’s “Golden Dome” defense system, Trump’s “Golden Fleet” shipbuilding program, and ridiculous executive orders on resumed nuclear testing.
Q: What’s the resolution of this crisis?
A: The same as always. More of this in return for more of that.
The system is totally broken. Expect deficits to soar out of sight.
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