Republican United States Senator from Ohio Jon Husted. (Photo: Kevin Dietsch/Getty Images)
With health insurance costs likely to skyrocket for more than half a million Ohioans, U.S. Sen. Jon Husted has proposed a compromise. It mainly involves raising costs or cutting benefits for low- and moderate-income consumers whose pay and insurance plans are not as good as his own.
The 43-day government shutdown that ended on Nov. 13 was primarily caused by subsidies created in 2021 to support people purchase health insurance on exchanges established under the Affordable Care Act.
They will expire in less than three weeks, resulting in the loss of premiums more than twice average for nearly 600,000 Ohioans AND 23 million Americans.
With the country plunged into affordability crisisthe huge majority of Americans they want the subsidy to be extended.
Democrats in Congress have refused to sign a budget bill reopening the government unless Republicans agree to such an extension.
The deadlock was broken when a petite group of Senate Democrats agreed to support the spending bill in exchange for a promise from Senate Majority Leader John Thune, R-D. He announced an extension of the vote before the subsidy expires.
A vote on extending the contract by three years is expected this week. But it is will probably fail among the Republican opposition.
This leaves the GOP with a political imperative to propose an alternative.
On November 20, Husted spoke on the Senate floor offer yours.
The former Ohio lieutenant governor was appointed to replace the seat vacated by J.D. Vance when Vance took over as vice president in January.
Husted will have to run for a Senate seat next November, and affordable health care will likely be a gigantic issue.
Husted is highly critical of ACA subsidies, which are credited with helping lower the percentage of uninsured Americans to all time low. He voted against their extension many times.
In his speech on November 20, Husted called them: “Another $350 billion on the national credit card for a program we know is dysfunctional.”
He provided an estimated cost over 10 years if insurance subsidies were made indefinite, according to Congressional Budget Office.
Last week, Husted’s office did not respond to a question about why he opposed extending the program in its current state, although he agreed that he voted for President Donald Trump’s One Big Beautiful Bill last summer.
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This bill extended the 2017 Trump tax cuts by providing: A $1 trillion windfall to the richest 1% of Americans in the coming decade. It also cut almost $1 trillion from Medicaidfederal health program for the impoverished and another $186 billion in federal food aid.
Even though he cuts programs for those in need, Husted continued to vote increases the deficit by $3.4 trillion– reports the Bipartisan Policy Center.
About 64% Americans currently have a positive view of the Affordable Care Act, or Obamacare. But like many Republican officials, Husted still doesn’t like it.
“I wasn’t here when Congress passed Obamacare or the Biden Covid subsidies that were used to support the ACA exchanges, but I want to be part of the solution,” he said. “I didn’t create the problem, but I’m here to be part of the solution.”
To this end, he proposed a “cheat, freeze and fix” approach.
Most relevant to Ohioans who obtain insurance on the ACA exchanges is the “frozen” portion of the formula.
“We must freeze subsidies at current levels to prevent them from becoming a growing burden on the American taxpayer,” Husted said.
The freeze will apply to people using exchanges. Either they will see their costs rise with inflation in the health sector, or some will be excluded from the program.
The 2024 grants saved the average recipient about $700 a year, but the savings could be almost $20,000 for some households.
If ACA subsidies expire, marketplace recipients will lose these savings.
This would create a enormous number of uninsured people who would continue to be ill but unable to pay for their care – an issue Husted did not discuss.
Trump’s bill, which Husted supports, is expected to take away insurance from about 4 million Americans further boost health care costs– the University of California at Berkeley reported in July.
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If subsidies are frozen, as Husted proposes, market participants will also lose, although not to the same extent.
According to Committee for a Responsible Federal Budgetthe cost of subsidies has increased from about $92 billion in 2023 to an estimated $138 billion this year.
At the same time, enrollment increased from 16 million Americans to approximately 23 million over the same period.
In other words, since 2023, the patient base has increased by approximately 44%, while costs have increased by approximately 50%.
Freezing the amount spent on the program would require a combination of reducing eligibility and increasing participant costs.
As for the “fraud” part of his proposal, Husted cited pandemic-era abuses in which brokers fraudulently enrolled people or changed insurance coverage without their consent.
His solution is to make people using the “Bronze” – i.e. the lowest – level of premium-free insurance pay at least a symbolic amount.
“Requiring each person receiving premium tax credit to contribute a small amount – at least a small amount – towards health insurance will help align incentives and reduce fraud,” he said.
“This will ensure that Americans cannot be enrolled in plans without their knowledge and consent.”
What he failed to note was that these plans come with high deductibles and often coinsurance that requires patients to pay a percentage of their treatment costs.
That’s why people on bronze plans typically pay more for care than others on the ACA exchanges.
In addition, Commonwealth Fund Reports show that safeguards implemented last year appear to be helping to address the fraud problem.
“After implementing this safeguard, the number of broker-initiated plan changes dropped by almost 70%, and changes that redirect a commission from a client’s original broker to a new one – a sign of potential misconduct – dropped by almost 90%,” it said.
Husted also complained about costs associated with the mid-market, or “Silver,” plan.
The way subsidies work is that people with the least money are encouraged to participate in these plans.
Generally, almost 60% people using ACA exchanges buy Silver plans.
Husted called the incentives “silver loading” and alleged that they inappropriately inflated spending.
“That increased federal grant spending,” he said. “He created a system that allowed himself to be deceived.”
But is it fair to suggest that this is somehow a scam designed to encourage people to apply plans that cover 70% of the “actuarial value” – the amount of medical expenses a person is likely to incur?
Bronze plans only cover 60% of the actuarial value and, if they include coinsurance, can expose people to catastrophic expenses.
Meanwhile, according to Doctors under the National Health ProgramHusted and his colleagues enjoy much better plans, compliments from taxpayers.
Physicians and Students of the National Health Program is a group of 20,000 physicians and medical students who advocate for a single-payer system like those in other developed countries.
They pay much less per person for health care and have much better results.
It said congressional plans cover 80% of the actuarial value, while “actuarial plans at 60-70% of the actuarial value for the general public (on the ACA exchanges) are considered underinsurance – plans that fail to provide adequate financial protection in the face of medical necessity.”
There is also the issue of relative income. As a senator, Husted earns $175,000 a year.
About 70% people on the ACA exchanges meet 250% or less of the federal poverty guidelines.
For a family of four it is approx $80,375 per yearwhich is a little more than half of what Husted produces.
Husted advocated three reforms that have considerable support in health policy circles:
- Price transparency so patients and health plans can be informed buyers
- Reforming the murky practices of intermediaries known as pharmacy benefit managers (PBMs). The three largest are owned by giant health conglomerates and control almost 80% of the market. They are suspected of increasing drug prices anti-competitive practices.
- Reform 340B program. Designed to subsidize care for the impoverished, costs have exploded. A lack of regulation allowed hospitals to collect funds in a similar way using this money for pay generous salaries and buy things like stadium naming rights.
“It will lower the real costs of health care,” Husted said of the reforms.
