Swing district Democrats press Congress to extend ACA subsidies before election

More than two dozen swing district House Democrats are pressuring congressional leadership to quickly pass an extension of Affordable Care Act (ACA) enhanced subsidies set to go away after this year, highlighting the political need for Democrats to act in the coming months. 

Rep. Lauren Underwood, D-Illinois, led 26 House members in swing districts in a letter to Senate and House leadership over the issue. The Democrats are also calling for closing the Medicaid coverage gap to extend Medicaid coverage to those in nonexpansion states. 

The boosted subsidies were included in the American Rescue Plan Act signed into law back in 2021 but will only go through this year. The subsidies helped fuel a record-breaking 14.5 million enrollment for 2022 coverage. 

“We cannot afford to backslide on this progress,” according to the letter. “Our constituents cannot afford to go back to paying upwards of 20%—or more—of their household income on healthcare premiums.”

The letter, comprised of vulnerable lawmakers, is a warning shot to leadership of the political ramifications of not acting on the ACA subsidy extension and of the desire to act fast. 

The lawmakers said insurers are already prepping for 2023 and need to know whether the enhanced subsidies will be around. 

“These concerns are not hypothetical: earlier this month, insurers in Vermont became the first state to file proposed premiums for 2023 and are seeking approval of premium increases as large as 24.2% over 2022 rates,” the letter said. 

Another eight state-based marketplaces are also projecting premium spikes if the credits aren’t extended. Plans are going to need to finalize their rates this summer ahead of open enrollment expected to start in early November. 

The boosted subsidies helped lower premiums for plans and ensured some low-income customers on the exchanges paid nothing or as low as $10 a month. It also ensured that anyone who earned more than 400% of the federal poverty level—the previous cutoff for eligibility for subsidies—would spend no more than 8.5% of their income on healthcare. 

The vulnerable Democrats are pressing for leadership to use a procedure called reconciliation that enables legislation to pass the Senate with only a simple majority and bypass a legislative filibuster that can be broken with 60 votes. 

Democrats had included an extension for the subsidies until 2025 in the Build Back Better Act, but, while that legislation passed the House last year, it has stalled in the Senate after opposition from Sen. Joe Manchin, D-West Virginia.

The legislation would have also closed the Medicaid coverage gap, extending healthcare to people in nonexpansion states that would have otherwise been eligible for Medicaid coverage.

State-run exchanges and insurers are already bracing for the extra subsidies to go away after 2022, preparing for major outreach to let consumers know of the potential premium spikes and the need for them to shop for a new plan. Several state-run exchange officials have said that consumers also took advantage of the boosted subsidies to buy a more expensive plan. 

“These out-of-pocket cost increases are imminent: starting this autumn, when enrollees begin receiving notices of their premium increases for 2023 health plans, our constituents will find that the same high-quality coverage that they have been able to afford thanks to the American Rescue Plan will now be out of reach,” the letter said. “We cannot allow the progress we have made to be temporary.”