Will ACA Enhanced Subsidies Really Lead to 340,000 Lost Jobs
A report project 340,000 job losses if ACA enhanced premiums expire
The current government shut down is primarily due to the Democrats push for an extension of the enhanced ACA premium subsidies that was enacted back in 2021 and have been extended through 2025 by the Inflation Reduction Act.
ACA was originally passed during the first Obama term and contained premium subsidies which could be substantial for lower income taxpayers. However, taxpayers whose income exceed 401% of the pertinent federal poverty level were ineligible for those premium subsidies.
The enhanced premium subsidies allow higher income taxpayers to still receive some subsidy and lower income taxpayers also received additional subsidies.
These increased subsidies are now scheduled to expire after this year. That is the main concern for the Democrats.
As expected, the major losses would be in states with higher populations such as Texas and those states that did not expand Medicaid would likely see higher losses too.
However, we find it hard to believe that 340,000 job losses would occur or as many people would lose their health care since the enhanced premium subsidies have only been in existence for five years (2021-2025).
Yes, premiums will rise due to medical inflation and many healthy taxpayers dropping off of the ACA, but these enhanced premium subsidies cost the American taxpayers over $31 billion a year and that is too much.
Likely Congress will reach a compromise and extend the subsidies but at a lower level for a year or two.
We will keep you posted.
There is no reason to extend a temporary provision which shouldn't have been enacted in the first place. The federal government should get back to the level of pre-2020 spending as a first step. Then continue cutting. Force the states to take up the slack for those programs they choose to adopt.