Key question in congressional budget debate: Preserve Obamacare tax credits?

A congressional showdown over whether to continue COVID-era tax breaks that make Affordable Care Act premiums less expensive will determine whether thousands of Long Islanders will soon see their health coverage costs spike.

Many rank-and-file Democrats, who complain party leaders have not more forcibly stood up in some previous fights against Republicans and President Donald Trump, are prepping for battle to renew the subsidies in a funding package to keep government agencies funded past Sept. 30.

But key Republicans and conservatives who control both the House and the Senate insist that the enhanced tax credits must end Dec. 31, as scheduled. They are refusing to go along with any language to extend the breaks in any stopgap or longer-range funding bill to prevent an Oct. 1 shutdown of some federal operations.

They and others note that congressional budget analysts project about $40 billion would be added to the deficit each year if these breaks are continued — costing taxpayers well over $300 billion by 2034.

"This was part of the temporary policies that were going to be in place as sort of a safety net to get us through COVID," House Budget Committee Chairman Jodey Arrington (R-Texas), said. "They were never intended to be beyond that."

New York’s junior senator, Kirsten Gillibrand — who heads the Democratic Senatorial Campaign Committee — differs. She is calling on her congressional colleagues "to include an extension of the ACA enhanced premium tax credits in any [government] funding bill that passes this fall."

"These subsidies save lives, and I’m determined to keep them in place," Gillibrand argues.

Gillibrand is not calling for Democrats to force a government shutdown if the extension is not included in the bills. Chuck Schumer, her fellow New Yorker who is the leader of Democrats in the Senate, said this week that he's willing to risk a shutdown if necessary.

Both he and House Minority Leader Hakeem Jeffries, also of Brooklyn, warned more broadly that they will be demanding major health care-related concessions from Republicans to repair what they described as an emerging national health care crisis because of other Trump and GOP policies.

"The Republicans have to come to meet with us in a true bipartisan negotiation to satisfy the American people’s needs on health care or they won’t get our votes, plain and simple," Schumer warned during a Capitol news conference.

Deadline approaches

The end-of-September deadline for the must-pass federal spending bill to keep agencies funded will be a first test of that threat. Even if merely a short-term, stopgap bill, it will require some Democratic support in the Senate to advance.

The stakes are high for many enrollees in the ACA, also known as Obamacare.

The program has always offered income-based subsidies. But those were significantly enhanced by 2021 legislation during the COVID-19 pandemic, and then again in 2022, when a previous income cap was removed and tax credits were included for more people at higher income levels.

But if, as scheduled, they were allowed to expire on Dec. 31, about 4.2 million Americans would see their coverage threatened, congressional budget analysts say.

In New York, more than 1.6 million Essential Plan enrollees and 140,000 Qualified Health Plans enrollees currently benefit from affordable Marketplace health insurance coverage thanks to the enhanced premium tax credits, according to the state health department.

But their premiums would increase statewide by an average of 38% if the credits were eliminated. That translates into average monthly premium increases of $114 for individuals, or $228 for couples, making the coverage unaffordable for tens of thousands, the state says.

On Long Island, there are a total of 117,200 Nassau County enrollees in the two plans receiving credits, and 133,500 Suffolk County enrollees getting these subsidies.
The average premium cost increase per month for those Long Island credit-eligible recipients, if the tax credits disappeared, would be 32%, state numbers show. That translates to average cost increases to individuals of as much as $115 a month and $219 for couples.

Strategy unclear

Earlier this month, Schumer sent a letter to major health insurance companies, pressing them to notify enrollees about the possible expiration of the enhanced ACA subsidies, part of an effort to build public pressure on Republicans to extend the tax credits.

But Schumer has not laid out his specific upcoming strategy as he and other Democrats this week continued to mull how to best counter significant GOP opposition — even if to obtain just a one-year extension of the credits. Whether his warning Thursday about withholding votes generally on health care fights would pertain to this issue, standing alone, was unclear.

Senate Majority Leader John Thune (R-S.D.) on Tuesday seemed to close the door to including language that would extend the credits — at least as part of a short-term government funding bill likely to be needed to avoid a shutdown Oct. 1.

He wants that bill to be "clean." He did not rule out discussion during negotiations on a bigger, fuller appropriations package later this fall.

House Speaker Mike Johnson (R-La.) on Tuesday poked at speculation Democrats might allow a shutdown over this, or other issues. "That’s not surprising, because they’re struggling, because they don’t really have a message or a leader, or their party registration is falling, their approval ratings are in the low 20s. And they are about to elect a Marxist to be the mayor of New York City."

Republican support

But there are signs of some internal GOP softening from previous harder-line opposition, include from Long Island’s two Republican House members.

"I was in a leadership meeting this week where options for the premium tax credits were discussed," said Rep. Andrew Garbarino, (R-Bayport), chairman of the House Committee on Homeland Security. "These conversations are ongoing, and our focus is on finding a solution to ensure people don’t lose insurance." Long Island’s other congressman, Nick LaLota (R-Amityville), said he is closely watching those talks at the committee levels.

And 11 moderate House Republicans — most of them facing potentially competitive reelections for their House seats next year — already signed on to bipartisan legislation co-sponsored by Long Island Rep. Tom Suozzi (D-Glen Cove) to extend the tax subsidies for an additional year.

In fact, some GOP political strategists warn that internal polling shows voters could punish some Republicans if the subsidies expire on the heels of previous GOP hits on health care this year.

Suozzi, who sits on the tax-code-writing Ways and Means Committee, said he sees this as a problem the party in control of Congress and the White House needs to resolve. He adds of those who depend on these subsidies, "we cannot allow them to face thousands of dollars of health insurance premium increases if these tax credits expire."