An Obamacare fiasco could blow up on Democrats right before the midterms - It could all come down to … Joe Manchin.

05/20/2022

A little over a year ago, President Joe Biden signed into law a massive expansion of financial aid designed to bolster the Affordable Care Act and make health insurance more affordable for millions.

But that early triumph is now looking more like a political time bomb.

Just six months out from the midterms, Democrats increasingly fear they’ll fail to renew those generous subsidies, which expire at the end of the year, triggering sudden spikes in insurance premiums and wiping out one of Biden’s signature health care accomplishments.

The price hikes would hit an estimated 13 million people across the country, potentially adding hundreds of dollars to families’ monthly expenses. And in a painful twist for a White House already struggling to contain anger over rising household costs, voters would begin receiving notices about their premium increases in October — around the same time they’re starting to cast their midterm ballots.

“It’s not a good look when you’re going into a midterm election,” said Sabrina Corlette, co-director of the Center on Health Insurance Reforms at Georgetown University’s McCourt School of Public Policy. “There could be some really awful stories about people losing coverage.”

The scenario has alarmed vulnerable lawmakers and White House allies, who have privately warned senior Democrats in recent weeks that the issue could cost Democrats control of the Senate and decimate their hard-earned reputation as the party of health care.

In polling, voters consistently rank health care affordability as a top domestic concern, second only to inflation. The enhanced subsidies — passed last March as part of Biden’s American Rescue Plan — have also pushed Obamacare sign-ups to new highs, adding 2.5 million new enrollees in a single year.

“This was a major accomplishment,” said Emily Gee, the coordinator for health policy at the progressive-minded Center for American Progress, which maintains close ties to the Biden administration. “[But] when fall rolls around, people are going to be looking at higher premiums, and that will be what’s salient — not the fact that Congress lowered premiums.”

Health experts predict abruptly eliminating the subsidies would especially reverse the coverage gains among Black people and those who live in red states that haven’t expanded Medicaid. For millions more, their monthly premiums would potentially skyrocket.

Despite the urgency, Democrats acknowledge there’s only one way to avert disaster: Strike a deal with Sen. Joe Manchin (D-W.Va.) on a reconciliation package.

Maintaining the subsidies is projected to cost tens of billions of dollars per year. And with Republicans uniformly opposed to continuing them, tucking an extension into the broader partisan bill is the last available option before the midterms.

That’s added yet another wrinkle to a negotiation between Manchin and Democratic leaders that has so far focused on just three areas: climate provisions, drug pricing and deficit reduction.

Staffers for Manchin and Senate Majority Leader Chuck Schumer have spent the last couple weeks exchanging preliminary ideas for what the framework of a bill might look like, three people with knowledge of the matter said. The discussions have boosted hopes that an agreement remains in reach, though there is little expectation of a breakthrough before Memorial Day.

In another sign that the talks are still in early stages, the White House has limited its direct involvement in the negotiations, with aides preferring instead to keep tabs on the discussion from afar until it’s clearer there’s substantial progress being made.

Representatives for Manchin and Schumer did not respond to requests for comment. A White House spokesperson declined to answer specific questions for this story, citing the administration’s policy against discussing its conversations with individual lawmakers.

While the initial focus on the package’s core elements had pushed the Obamacare subsidies onto the back burner, they have become the subject of more intense focus recently. On Tuesday, top White House aides and senior health officials met with more than a dozen heads of state health exchanges to discuss the potential expiration of the subsidies, pressing them for specifics on how exactly the price hikes would play out in individual states and what the impact would be across the country.

The exchange directors warned the group — which included Domestic Policy Council Deputy Director Christen Linke Young, Deputy Health Secretary Andrea Palm and Medicare and Medicaid chief Chiquita Brooks-LaSure — that losing the aid would pile more costs on families already stretched by rising gas and grocery prices.

They also emphasized that Congress is running up against a deadline to avoid chaos and confusion. Insurers will begin setting their rates this summer, in preparation for notifying enrollees come the fall.

“Any additional increase on health insurance is just not going to be sustainable for people,” said Mila Kofman, the head of D.C.’s Obamacare exchange. “They’re going to be choosing between their food, going to work or keeping a roof over their head.”

Senate Democrats also are anxious about the impact a rate shock could have on their ability to keep control of the chamber. The worry has further fueled the desire to pass a reconciliation bill by July 4, just before insurers in many states begin locking in their rate hikes.

If they fail to do that, aides and others familiar with the discussions said, there’s widespread recognition that Democrats stand to take much of the blame from voters, who are prone to take out their frustrations on those in power.

“It’d be legislative malpractice,” said one person working with Democratic leaders on the issue. “It plays into the inflation concerns that all consumers have.”

While Democrats are aiming to avoid this political peril, they recognize they must first get Manchin to agree on the reconciliation bill’s core elements. Though he’s supported expanding Obamacare in the past, Manchin has so far been noncommittal about adding the subsidies into an eventual bill.

“I don’t know how many times I could say it over and over,” he said this week. “You get taxes, you get drugs and you could get an energy/climate bill.”

Health advocates still say they are confident the subsidies will be first in line for inclusion once those primary issues are settled.

“Nobody has an ounce of doubt about the policy merits,” said Eliot Fishman, the senior director of health policy at progressive advocacy group Families USA. “It’s an area that unites the Democratic caucus more than any other.”

But just in case, they are ramping up the pressure behind the scenes. Families USA this week published a new analysis estimating state-by-state premium hikes, noting in particular that residents in Manchin’s state “will experience the country’s steepest increases.”

And after meeting Tuesday with senior Biden officials, the state exchange directors trekked over to the Capitol to make a similar pitch to Hill staffers who included top aides to House Speaker Nancy Pelosi, Senate Minority Leader Mitch McConnell and the Senate Finance Committee.

The high-level meetings demonstrate the great concern over the subsidies’ expiration, Kofman, the D.C. exchange director, said. But none of those sessions ended with any indication that Democrats have a solution on hand.

“I did get the sense” at least, she said, “that everyone understood the timing is urgent.”