‘Biden’s COVID credits didn’t reduce health care costs – they just shifted them to taxpayers while padding insurer and enrollment intermediary profits’
Halloween could come early this year. The Democrats have named their price to avoid a government shutdown come October – an additional $350 billion for healthcare over the next decade. Critics say a big chunk of that money may go to ghosts.
At issue are the generous subsidies the Biden administration created for Affordable Care Act policies, sweeteners that are slated to expire in December. Making healthcare essentially free for millions of Americans, those policies have skyrocketed enrollment in Obamacare plans. But a recent study found they have also sparked a curious phenomenon: an estimated 12 million enrollees “without a single claim – no doctor visit, lab test, or prescription filled” in 2024.
The Paragon Health Institute study reports that this is triple the number of no-claim policyholders before the Biden sweeteners were put in place. “Among those now eligible for zero-premium plans with low or no deductible,” the study found, “that number increased nearly sevenfold. … A whopping 40 percent of enrollees in fully subsidized plans had no claims in 2024. In 2024 alone, taxpayers sent at least $35 billion to insurers for people who paid no premiums and never used their plan,” the report said.
Although many analysts suspect that these numbers suggest widespread fraud, Democrats and the insurance industry argue that they reflect consumers taking advantage of affordable coverage. They warn that the expiration of Biden-era reforms will make policies far more expensive for more than 20 million Americans. “If Congress fails to extend the health care tax credits, millions of Americans will face immediate and severe premium increases, leading many to forgo coverage altogether,” said Chris Bond, a spokesman for AHIP, the lobbying arm of the health insurance industry. “Congress must act as quickly as possible to protect Americans from this affordability crisis.”
As Democrats have made healthcare their line in the sand to avert a partial government shutdown on Oct. 1, Biden-era expansions of Obamacare are receiving new attention as a symbol of both expanding access to healthcare and of spending run amok.
Critics say they underscore the findings of the Department of Government Efficiency (DOGE), which has highlighted a lack of accountability in massive government spending programs at a time when the federal government is struggling to corral massive deficits and debt. They say the Biden sweeteners also illustrate how and why government spending keeps increasing: Once a subsidy is put in place, it is hard to take it away from voters.
Swollen Rolls
The Obamacare expansion at issue came about through legislation and regulations during Biden’s term and was often cast as a response to the COVID pandemic. First, the scope of who was eligible for subsidies was broadened, making it available to households with incomes above 400% of the federal poverty line – making a family of four earning up to $160,000 eligible for subsidized plans. Also, increased subsidies made Obamacare free for those with incomes between 100% and 150% of the poverty line, and longer enrollment periods were created.
The cost for this, on the other hand, is borne by taxpayers.
“Biden’s COVID credits didn’t reduce health care costs – they just shifted them to taxpayers while padding insurer and enrollment intermediary profits,” Paragon President Brian Blase said.
Like all gigantic markets and massive government programs, the Affordable Care Act and what people pay each month have become a very complicated thing, varying by age, state, level of plan, and other factors. But the figures for the Obamacare “reference plan” (silver level) reveal what has happened since the COVID pandemic.
In 2021, when Biden was inaugurated, that basic plan cost an individual $27 a month if they reported income along the federal poverty line, which stood around $14,500 a year. For those making 50% more, the “reference plan” cost $75 a month, and so on up to $152 a month for someone making more than $30,000. Those monthly payment figures were constant regardless of what the insurers charged, with taxpayers making up the difference.
Through legislation Biden pushed through by narrow majorities or via reconciliation, the amount someone would pay each month in the first two categories dropped to zero. And as Obamacare became essentially free, millions signed up – enrolling at rates the plan had never seen since its inception in 2013.
The overall figures reflect this explosion.
