When Democrats and Republicans put forward competing Senate bills Thursday to provide enhanced federal support to more than 20 million people getting their insurance through the Affordable Care Act, to many people it might look like a genuine debate.
To the American Enterprise Institute’s Yuval Levin, an expert on health care policy, it looks like “the Republicans are basically negotiating their surrender” on Obamacare.
“The basic background of all this is just the very longstanding Republican paralysis on health care,” Levin told The Dispatch. Republicans are “trying to figure out how much of what the Democrats want that they should be giving them rather than what Republicans want instead.”
The dueling bills, respectively sponsored by Democratic Sen. Ron Wyden of Oregon and Republican Sen. Bill Cassidy of Louisiana, are being debated in response to the expiration of enhanced Obamacare subsidies set to expire this month.
In 2021 and 2022, congressional Democrats used the budget reconciliation process—by which the Senate can bypass the 60-vote hurdle for most legislation and pass a bill with a simple majority—to increase Obamacare subsidies. Before 2021, no one making more than 400 percent of the federal poverty level could qualify for Obamacare subsidies, but the new laws lifted the 400 percent cap and enhanced subsidies for those earning less.
Under the 2021 and 2022 laws, according to the Committee for a Responsible Federal Budget, premiums are capped at 2 percent of income for those earning 200 percent of the federal poverty level, 6 percent of income for those earning 300 percent of the poverty level, and 8.5 percent for those earning more than 400 percent. “If the enhanced subsidies were ultimately extended permanently, we estimate this cost would rise to $545 billion through 2035 before interest and $635 billion including interest,” the Committee for a Responsible Federal Budget reported in its analysis of the Wyden-sponsored bill. That’s a hefty sum, equivalent to nearly half of the underlying cost of Obamacare subsidies provided for in permanent law that total $1.3 trillion over 10 years.
The Cassidy bill, which has not yet been formally analyzed by the Committee for a Responsible Federal Budget, doesn’t extend the enhanced subsidies but assists ACA beneficiaries primarily by depositing federal funds in Health Savings Accounts. “It’s the kind of endgame you can imagine here, which is essentially giving the Democrats the money they want, but pretending like it’s being given to people directly,” Levin said on Tuesday. “If you can get the Democrats to accept this as a compromise, then it probably will cost less than what they want. But it is basically a way of filling in the gap, and I think it just creates a new benefit that will never go away.”
But Democratic leaders quickly shot down the Cassidy bill. It was “dead on arrival,” Senate Minority Leader Chuck Schumer said at a press conference. “It increases costs, adds tons of new abortion restrictions for women, expands junk fees and permanently funds cost sharing reductions. Their bill is junk insurance.”
The Cassidy bill would apply the Hyde Amendment—which prohibits federal funding of abortion except in cases of rape, incest, and when the life of the mother is endangered—to the new federal funds deposited in Health Savings Accounts and new cost-sharing reduction payments, but it would not change the underlying abortion provisions in the 2010 law. The issue of taxpayer-funded abortion was one of the most contentious issues when Obamacare was debated by an overwhelmingly Democratic Congress in 2009 and 2010, and it could be a major sticking point in any resolution of the current standoff over enhanced funding.
“There’s a long-standing principle that taxpayer money doesn’t pay for abortion, and that had been established and stood in place for the entirety of the Roe era, and so to violate that principle really was a big deal,” Levin said. Obamacare “was the first real break with the Hyde Amendment.”
The Hyde Amendment has been applied to every annual appropriations bill funding Medicaid since 1977. When Obamacare first passed the House in 2009, it did so with the Hyde Amendment attached—a measure that 64 Democratic representatives voted for—but the Senate version of the bill that ultimately became law did not include Hyde. Rather, the law enacted in 2010 required federally subsidized state health insurance exchanges to offer health plans that included coverage of elective abortion by default unless state legislatures enacted abortion limits.
Dan Lipinski, a former Illinois congressman and pro-life Democrat who voted to pass the 2009 House Obamacare bill that included the Hyde Amendment but opposed the final bill that did not include it, insisted that Republicans “shouldn’t be afraid” to make opposition to taxpayer-funded of abortion an issue. “It’s not a huge abortion restriction,” Lipinski told The Dispatch. “A majority of Americans still don’t think taxpayer funds should be going to pay for abortion or insurance that covers abortion.”
But one pro-life leader told The Dispatch that few Republicans in Congress were even aware of the issue of taxpayer-funded abortion in Obamacare until pro-life groups raised the looming issue of expiring Obamacare subsidies this summer. The overwhelming majority of members of Congress weren’t in office when Obamacare was first passed in 2010, and the issue of Obamacare subsidizing abortion hasn’t gotten much attention over the past 15 years. One reason for that lack of attention is that the 2010 law provided subsidies that were automatic and mandatory, not subject to the annual appropriations bills to which the Hyde Amendment is attached.
But it takes an affirmative vote of Congress to do something about the expiring enhanced subsidies, which is why the issue has come to the forefront now. Pro-life groups and most congressional Republicans have insisted that any new funds they vote for must apply the Hyde Amendment.
Democrats “have never ever had any Republican support for that product without Hyde protections on it,” South Dakota GOP Sen. Mike Rounds told The Dispatch on Tuesday. “They may have a decision to make: Do they want to extend and add some additional assistance for health-care products, or are they going to stand by abortion policy?”
Sen. Thom Tillis of North Carolina, a retiring Republican and bipartisan dealmaker, also criticized Democrats for objecting to the measure. “Democrats continue to be dismissive about Hyde protections, because they say they’re effectively in there,” Tillis told National Review’s Audrey Fahlberg. “If they’re interested in actually extending the subsidies, if they’re effectively in there, then why should they worry about us putting language in that assures that?”
“They want to do something that will turn back the clock,” Wyden told The Dispatch when asked why applying Hyde to new Obamacare funds was such a sticking point when the measure is already applied to bipartisan bills funding Medicaid.
Whether Republicans cave or hold the line on the issue of taxpayer funding of abortion remains to be seen. President Donald Trump has demonstrated little interest in placating pro-lifers since the Dobbs decision overturned Roe v. Wade in 2022. House Speaker Mike Johnson has been committed to the pro-life cause but has not yet endorsed any specific path forward on enhanced Obamacare subsidies. If Congress doesn’t reach a deal on enhanced subsidies in December, the issue could be the subject of another government shutdown fight when funding for the government runs out at the end of January.
Regardless of the outcome of the abortion issue, the fact that Republicans are now willing to provide even more support to Obamacare beneficiaries than required under the original terms of the 2010 law underscores just how defeated the party is on the issue of health care. Long gone are the days of Texas Sen. Ted Cruz’s vow to defund Obamacare in 2013 and Trump’s 2016 promises (along with other GOP presidential candidates) to repeal and replace the entitlement.
“The Obamacare extension really did create a new class of dependent people, and Republicans don’t really have anything else to offer them, so they’re just in a bad place,” Levin said.
At the same time, the pressure for even more subsidies than provided for in the original law reveals the Affordable Care Act has not lived up to its promise to make health care more affordable. “In the Republicans’ defense, the Democrats don’t have any ideas either,” Levin said. “They’re just saying we should spend the money to keep Obamacare funded, even though it’s not working.”
