Congress is ending the year without renewing the Affordable Care Act’s enhanced, temporary subsidies. As a result, premiums for ACA plans are expected to rise. Taxpayers will continue subsidizing most marketplace enrollees, but some people may face higher costs that lead them to seek alternate coverage or go without.
Letting the extra subsidies end is forcing something we’ve avoided for years: an honest conversation about what health care and health insurance really cost and how lawmakers and patients can help keep prices down.
A House bill passed on Dec. 17 was the latest vehicle where supporters of enhanced subsidies hoped to extend them again. The bill did not. It did include provisions that would have altered parts of the ACA, but none of those changes will take effect without Senate action — which is not expected — leaving the law’s structure unchanged as well. While the ACA has expanded coverage in its 15 years, it has not delivered cost control or meaningful competition.
The ACA will continue to operate as written, and the temporary subsidy enhancements are set to expire, returning the law to its pre-2021 framework as scheduled. A politically charged debate will now carry into January.
The enhanced subsidies were not permanent reform. They were introduced as a short-term response to extraordinary conditions, then repeatedly extended as prices continued to climb. Over time, they became a crutch — a way to hide rising costs by shifting them onto taxpayers rather than confronting what’s driving those costs upward.
Expanding subsidies continues to change who pays what for the insurance premiums, not what care costs. It does nothing to slow price growth, encourage competition or improve value. It simply redistributes the bill while leaving the underlying system untouched. Calling that affordability is a mistake.
For too long, health care reform has revolved around cost shifting. Expenses move between employers and employees, from patients to taxpayers, from states to providers and between states and the federal government. None of these shifts represents progress. Cost shifting is not cost containment. A system that relies increasingly on government subsidies without addressing prices inevitably becomes more expensive, less transparent and more dependent.
Many workers with employer-provided insurance feel the cost shifting acutely. While paying higher premiums and deductibles, seeing fewer choices and experiencing slower wage growth, they have also helped fund these subsidies with their tax dollars.
A better way
We need a system with more people invested in price, not fewer. Our third-party payer system, where the government or an employer writes the check for a large chunk of the cost for health care, is harmful. When patients are insulated from costs, providers and carriers face less pressure to compete. When insurers negotiate prices behind closed doors, consumers lose the ability to compare options. Market conditions are weakened when the government acts as a payer rather than a referee.
A healthier system would look very different. It would reward price transparency, competition and healthy decision-making. It would have a meaningful role for informed consumers. It would prioritize decisions made between doctors and patients, rather than decisions driven by reimbursement rules and regulatory complexity. And it would support a marketplace with more payers, more choices and more competition — not consolidation into fewer hands.
Subsidies are not a substitute for structural reform. If taxpayer dollars are the primary tool we use to make health care “affordable,” we shouldn’t be surprised when prices keep rising and dependency deepens.
Washington lawmakers need to resist the temptation to solve affordability problems among the ACA crowd with any more cost shifting. Price caps for state-insured workers, chronic Medicaid underpayment and new limits on medical debt collection all push costs into the commercial market and weaken provider finances, raising premiums in the process. If the expiration of enhanced ACA subsidies and recent Medicaid reforms do bring with them more uncompensated care, the state should be prepared to use any resulting Medicaid savings to help stabilize hospitals — rather than layering on more mandates that ultimately make care more expensive.
The decision not to renew the enhanced ACA subsidies this December doesn’t end the debate — it postpones it. This fight is becoming as not-temporary as the subsidies being fought about. It will continue into January. That delay creates space to ask better questions: How do we contain costs rather than conceal them? How do we expand choice rather than dependency? And how do we build a system that works because prices make sense — not because taxpayers keep absorbing the burden?
If we’re serious about affordability, we have to stop rearranging who pays the bill and start fixing why the bill is so high.
