What to Cut? Start with the Subsidies to Health-Insurance Companies

(digicomphoto/Getty Images) Advice for congressional Democrats looking to trim the $3.5 trillion reconciliation package: Cut the $600 billion of subsidies to health-insurance companies.

The news is full of stories about the “tough” choices that congressional Democrats must make to trim their massive $3.5 trillion reconciliation package. Here’s an easy one — eliminate the $600 billion in subsidies to health-insurance companies that are currently included in the legislation. This $600 billion does not represent health-care reform and does nothing to expand choices, lower costs, or make programs work better for patients. Rather, it throws more money at wasteful, micromanaged, government-run programs.

Senator Bernie Sanders, the chairman of the Senate Budget Committee, a socialist who caucuses with the Democrats, has bemoaned the massive profits of the health-care industry. Unlike the rhetoric, the reality is that the reconciliation bill would significantly boost those massive profits. The proposed windfalls for health insurers build on key provisions of the Affordable Care Act (ACA) that delivered hundreds of billions of taxpayer dollars directly to health-insurance companies. In 2020, federal taxpayers covered 74 percent of the total premium for people enrolled in the ACA exchanges. As a result of the ACA, insurance-company

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