Dems Push For Extension Of Biden Covid Credits

As Milton Friedman warned us more than 40 years ago, “Nothing is so permanent as a temporary government program.” Imagine what the late, great free market economist would think of the tyranny of the left’s latest political gambit — shutting down the federal government to extend the massive expansion of Obamacare subsidies sold as pandemic relief. 

The political hill that Democrats are daily dying on as the shutdown molders into a third week is the preservation of the debt-busting Biden Covid credits, costing taxpayers hundreds of billions of dollars more and once again making a mockery of temporary.

‘Supersizing Taxpayer Payments’

In March 2021, then-President Joe Biden signed the so-called America Rescue Plan Act (ARPA), the nearly $2 trillion money suck identifying as a “stimulus” package ostensibly to save America from the pandemic. Among many bigger big government initiatives, the boondoggle vastly expanded subsidies in the failed socialist experiment known as Obamacare. The expansion was extended in the ill-named Inflation Reduction Act of 2022, “supersizing taxpayer payments to insurers,” writes the Foundation for Government Accountability’s Trevor Carlsen and Brian Blase in a pointed policy paper urging Congress to call the time of death on the insanely expensive Biden Covid credits. 

How expensive? Taxpayers will be on the hook for an estimated $450 billion if Republicans give in to the Democrats’ hostage demands: reopening the government in exchange for extending the Covid credits beyond its expiration date of Dec. 31. 

“The expansion occurred under the argument that we needed to do this because we were in the midst of a pandemic,” Carlsen, Senior Research Fellow at the Foundation for Government Accountability (FGA) and former policy adviser in the U.S. Department of Labor, said in an interview with The Federalist. By the time ARPA passed, many of the state lockdowns were coming down and so-called non-essential businesses were up and running again. By 2022, when majority Democrats voted to extend the Biden Covid credits, the health emergency was well over. 

‘We’ve Got to Get Back to Normal’

Carlsen said the higher healthcare subsidies that were sold as necessary during the pandemic are hard to justify years removed from the “health emergency.”  

“The American people rightfully are saying that, at a certain point, we’ve got to get back to normal,” the policy expert said. 

That point is long past due. Particularly, as Americans learn more about just how generous the expanded Obamacare benefits have been. As the policy paper notes, the Democrats’ subsidy enhancements that have been hanging on for four-plus years made two fundamental changes to “the nature of the ObamaCare subsidies.” 

Households with incomes above 400 percent of the Federal Poverty Level (FPL), were included, “subsidizing even affluent households’ health insurance,” note Carlsen and Blase, the Foundation for Government Accountability’s Visiting Fellow and former Special Assistant to the President for Economic Policy at the White House National Economic Council. 

According to the Centers for Medicare & Medicaid, 7 percent of households enrolled in the heavily subsidized health insurance exchanges in 2024 and 2025 reported income greater than 400 percent of the federal poverty level. That number was 8 percent in 2022 and 2023. That’s annual earnings of $62,600 or more, according to the Department of Health and Human Services poverty guidelines.  

The Covid credits also expanded subsidies across all income categories. 

“The extra subsidies were meant to prevent health insurance coverage rates from declining during the pandemic. But the public health emergency ended nearly two and a half years ago.”

Taxpayers are on the hook for more than two-thirds of the plan’s premium for average enrollees with earnings between 200 and 250 percent of the poverty level, the policy paper states. 

What’s Another $1.5 Trillion?

A wide majority of Americans say it’s time for the expanded Obamacare subsidies to expire. 

A new poll from the Center for Excellence in Polling finds 65 percent of likely voters support ending federal health care payments for higher income individuals while returning to pre-Covid rates for lower-income Americans. 

“Support for returning to pre-COVID marketplace rates comes from voters across the political spectrum, including two in three Democrats (67%), Independents (66%), and Trump voters (67%),” the pollster reports in a press release.

But even if Republicans hold their ground for a clean Continuing Resolution without the Biden Covid credits, taxpayers will still be stuck with a dysfunctional Obamacare system. The 15-year-old health insurance law with its big government mandates and pricing rules has raised insurance prices and diminished quality of care, all while boosting the bottom lines of the “greedy” insurance companies they love to hate, the FGA report argues. 

As Carlsen and Blase note, even without the generous Covid credits, Obamacare’s original subsidies will cost taxpayers nearly $1 trillion over the next decade. If Democrats get what they want in the shutdown saga, the expanded subsidies would hike the cost by more than 40 percent, the policy paper asserts. 

Feeding the Beast

To top it all off, the Biden Covid credits have led to an explosion of fraud. The system is littered with “phantom enrollees,” Obamacare consumers who unknowingly signed up or are double-covered in the insurance marketplace, the FGA report notes. Health and Human Services found that there are 1.6 million or more individuals with double coverage — through Medicaid and a subsidized exchange plan. The FGA report notes 40 percent of enrollees in plans fully covered by taxpayers didn’t have a single claim in 2024. 

“In 2024 alone, taxpayers sent at least $35 billion to insurers for people who paid no premiums and never used their plan,” the policy paper states. 

Carlsen and Blase argue that the Democrats’ “temporary” Obamacare subsidy expansion would “reduce employer coverage, prop up insurer profits, and entrench a dysfunctional regulatory structure that significantly increased premiums, lowered the quality of individual market plans, and reduced Americans’ options for health coverage.” 

Of course, turning the temporary welfare program into a permanent payout is the ultimate goal of the Democratic Party. And, as we know, permanency in government comes with a hefty price. 

“Americans are concerned with government that is too large,” Carlsen told The Federalist. “The government that can give you everything can also take away everything.” 

Matt Kittle is a senior elections correspondent for The Federalist. An award-winning investigative reporter and 30-year veteran of print, broadcast, and online journalism, Kittle previously served as the executive director of Empower Wisconsin.