US Politics

Dems weigh new plan to defuse Obamacare subsidy bomb

House Majority Leader Steny Hoyer speaks.

Those subsidies are set to expire later this year. The plan under consideration would keep them in place for at least another few years, postponing the insurance premium hikes projected to hit roughly 13 million Americans. It would stop well short of making them a permanent part of the Affordable Care Act, sharply curtailing the overall cost.

Democratic leaders had long hoped to renew the subsidies as part of their sweeping climate, tax reform and prescription drugs package. But Manchin has demanded a smaller bill that funnels half its savings toward deficit reduction.

That’s made a cheaper, short-term extension perhaps the only viable option for salvaging the Obamacare aid — as long as negotiators can get Manchin to drop his separate desire for every program in the reconciliation bill to be made permanent.

“Everyone recognizes that it needs to be done,” one of the people familiar with the discussions said of the subsidy extension. “But to get it done under our current understanding of the framework, he’d have to make an exception.”

The search for a path forward on the issue comes amid rising Democratic anxiety over the potential political fallout if the enhanced subsidies expire. The subsidies passed as part of last year’s American Rescue Plan that slashed the cost of health insurance for millions of people, with many lower-income enrollees paying close to nothing for their coverage. As more people became eligible for assistance, Obamacare enrollment surged to new highs.

Absent an extension, insurers will likely begin sending advance notice of rate hikes to voters in October. That, in turn, could worsen an already difficult situation for vulnerable Democrats and White House advisers grappling with public anger over inflation that threatens to cost the party its Senate and House majorities.

“We may not be able to control some things with inflation,” House Majority Leader Steny Hoyer said on Thursday. “This is one thing we can control.”

Speaker Nancy Pelosi has pressed the issue repeatedly in recent conversations about the reconciliation negotiations, the people familiar with the discussions said, including during a meeting last week with Biden and Senate Majority Leader Chuck Schumer.

Democratic lawmakers, the health insurance industry and advocacy groups closely aligned with the party have…

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