by Mitch Kokai
Senior Political Analyst, John Locke Foundation
One of the central flaws of Obamacare’s design is that it offsets the costs of covering older and sicker individuals by driving up insurance premiums for younger and healthier individuals, who are forced to purchase more insurance than they want — or to go uninsured. The skyrocketing premiums are especially noticeable to those who earn just too much to qualify for government subsidies.
When President Biden came into office, Democrats used Covid as an excuse to inject $1.9 trillion in deficit spending into an already-recovering economy to spend on a laundry list of liberal priorities. There is now a broad consensus that this helped fuel the inflationary crisis we now find ourselves in, which Manchin claims is one of his primary concerns. As part of that legislation, which Manchin voted for, Democrats threw $54 billion into patching over Obamacare. Rather than fixing its underlying flaws, Manchin simply voted to make the subsidies more generous, shielding more people from the exorbitant prices that were a natural consequence of Obamacare’s regulatory regime.
As with most so-called “fixes” that don’t address underlying problems, that didn’t end the matter. Those enhanced subsidies are going to expire at the end of the year. Given that the signup period for insurance starts on November 1, barring action, Democrats could face another wave of headlines about Obamacare “sticker shock” going into what is already a disastrous midterm-campaign environment for them. Manchin has now indicated a willingness to vote in favor of another two-year extension. Such a move, it should be said, would be inflationary, because it would be indistinguishable from giving people money. …
… Last year, Manchin blasted fellow Democrats for engaging in “shell games” and employing “budget gimmicks” to disguise the true cost of Build Back Better. What he was specifically criticizing was how they would authorize a few years of funding for various programs without considering the cost of those expenditures being made permanently. But that is exactly the sort of budget math Manchin would be endorsing in this new health-care-focused bill.