There’s a reason so many people need help paying for their health insurance.
By Jonathan Cohn
REPUBLICANS STILL WANT YOU TO BELIEVE that the government shutdown is all about Democrats trying to subsidize insurance companies and illegal aliens—and propping up what Republicans say is a failed government program, Obamacare.
But at its core the Democratic party’s demand has always been about something else, something much simpler. They want to help millions of Americans who will have to pay a lot more for their health care if Congress doesn’t act.
Lindsay Corley is one of those people.
Corley, 40, is a freelance communications and marketing specialist in Atlanta who suffers from a condition called complex regional pain syndrome. Not many people have heard of it, because not many people get it. But for those who do, it is excruciating—a continuous, sometimes throbbing pain said to be even more intense than childbirth.1
The condition frequently starts with an injury or treatment for an injury, which is what Corley told me happened to her. Back in February 2012, she was driving home to Georgia from Kentucky, where she was taking part-time graduate classes to become a hospital chaplain. She was trying to beat a storm, only to get caught in whiteout conditions when snow rolled into the Blue Ridge Mountains quicker than forecasters had predicted. She hit black ice, spun out, and slammed into the median.
Corley was able to walk away. But in about a week she started feeling dizzy and nauseated, and found even dull light and sound painful—all from what doctors later concluded was a severe concussion. Years of symptoms, treatments, and then even worse symptoms followed, until she got to the point where, as she put it, ”the back of my head feels like it’s burning, like a hot curling iron pressed against my skin.”
The syndrome responds to treatments, including specialty drugs that Corley pays for with insurance she gets from the Affordable Care Act. “It’s the difference between having a quality of life and having no quality of life,” she told me. “I’d be spending my life on a couch.” But she says the only way she can afford the insurance is with subsidies worth several hundred dollars a month. Those subsidies are about to shrink, because a temporary boost to them that Democrats enacted four years ago is set to expire on December 31.
Premiums are expected to more than double, on average, for the more than 20 million people who buy private coverage at HealthCare.gov and state-run counterparts. In practice, that can mean individuals or families will be shelling out hundreds or thousands of dollars more each year to get insurance—as people shopping early for next year’s coverage are starting to discover on their own, all across the country.
That includes Corley’s home state of Georgia—which is why Marjorie Taylor Greene, the House Republican also from Georgia, has called for extending the subsidies past December.2 That’s also what Democrats have been demanding, as a condition for reopening the government.
But Republican leaders have said no, at least so far. That has people like Corley wondering how they’ll find the extra money either to keep their current coverage or to cover the higher out-of-pocket costs they would face if they have to buy a cheaper, skimpier policy.
Her insurance isn’t great, she told me, citing fights she’s had to wage over her specialty drugs and disputed hospital bills. But she says that the coverage is enough for her to get by—barely—and that she’ll be in big trouble if its price jumps.
“Will it mean I have to move back with my parents?” Corley said. “Will I have to take less medication, and just be in a lot more pain?”
“These are the things that go through your mind,” she said. “I’m not sure people understand that.”
A BIG REASON REPUBLICANS object to extending the subsidies is the cost, which works out to about $35 billion a year. But it’s not just the amount of money involved that they find objectionable. It’s also the principle: The bigger the subsidies, the more money is taken from hard-working taxpayers. (And, some on the right would additionally complain, the more money is transferred to less productive members of society, creating potential dependency.)
It’s true that, with the extra subsidies, the federal government can end up covering the entire premium for some people at low incomes, since they qualify for the most assistance.3 But that’s what happens in a social insurance system: Healthy people pay more to cover the costs of the sick, rich people pay more to pay the costs of the poor. And when health care is as expensive as it is in the United States, there’s simply no way to make health care affordable to everyone without a lot of those transfers.
A little math can help illustrate why. Annual health care costs in the United States are about $13,400 per person, based on the most recent figures available, according to the Peterson-KFF Health System Tracker. That’s way more than somebody at even twice the poverty line—which works out to about $30,000 in annual income—can possibly afford. They’re going to need a ton of help.
This brings us to another principled argument critics make: that massive government expenditures warp the market pressures in the health care sector and contribute to runaway costs. That’s because, according to these critics, the subsidies inject more money into health care, which, in turn, induces providers of care to raise prices while reducing the incentives to resist.
To be clear, this is an argument conservatives have made about the Affordable Care Act from the very beginning. The twist now is that they say the problem got even worse with the extra subsidies Democrats added in 2021—the ones that are a central issue in the shutdown fight.
“If the underlying Obamacare subsidies were inflationary, then the Biden enhancements to it just pour fuel on that underlying inflationary structure,” Brian Blase, president of the right-leaning Paragon Health Institute, told Fox News earlier this month.
But the numbers tell a different story.
One of the best ways to measure health care spending is by looking at a country’s overall spending on medical care and comparing it to the country’s overall economic output—or, as the wonks put it, health care spending as a percentage of gross domestic product.
In the fifteen years before the Affordable Care Act became law, health care spending went from 13.4 percent to 17.2 percent. In the fifteen years since the law’s enactment, that figure has barely budged, moving from 17.2 to just 17.6 percent.
“If your thesis is that the Affordable Care Act has caused health care costs in the U.S. to explode, it’s pretty hard to square that claim with the facts,” Matthew Fiedler, a Brookings Institution economist who served in the Obama administration, told me.
TO BE CLEAR, 17.6 PERCENT OF GDP still represents a huge share of economic output going to health care. It would be great to get that number down, so that it didn’t take such big subsidies to make insurance affordable for Americans like Lindsay Corley.
One way to do it would be to create the kind of “Medicare for All” system that progressives like Sen. Bernie Sanders have long championed—and that he endorsed once again on Wednesday night, during a joint CNN town hall with Rep. Alexandria Ocasio-Cortez.
Lots of people know that in a Medicare for All system, the government provides insurance to everybody directly. Less well known is that in a Medicare for All system, the government also controls costs—whether by setting an overall national health spending budget, regulating the prices of particular health care services and supplies, or a combination of the two.
That’s how things work in most national health systems, including ones that exist in places like Switzerland where the coverage is all through private insurance. That’s also a big part of why they all spend so much less.
An alternative is to shift more of the burden for medical expenses onto individuals, and let the markets do their work. This is the strategy many conservatives prefer; sometimes they call it giving people more “skin in the game.” And there’s evidence their approach does reduce national health spending—for the very simple (and predictable) reason that if people have to pay more of their own money on health care they’re less likely to get it.
Plenty of times that’s fine, because lots of medical care turns out to be unnecessary, wasteful, and sometimes even counterproductive. But plenty of times it isn’t, because people with serious medical needs end up rationing their own care—by skipping doctor visits, splitting pills, or taking other steps that can prevent their conditions from getting worse.6
Of course, controlling costs through government regulation comes with its own tradeoffs—like potentially deterring innovation if it reduces profit margins too much, or causing closures of facilities like hospitals if it cuts their fees too hastily. And that’s to say nothing of the political difficulties that come anytime elected officials try to take money out of the pockets of industries like insurers, hospitals, and drug makers that have lots of sway in Washington.
That’s why the changes that get through Congress have tended to be more incremental than transformational—and why cost control has been such a long, painstaking process. It’s also why, for the foreseeable future, the only way to make comprehensive insurance widely available is to subsidize the heck out of it.
Some people will find that objectionable, because of the extra burden it puts on taxpayers. Which is fair enough. It’s more a philosophical question than an analytical one.
But they might want to remember that taxpayers are also people—not just economic actors but human beings with vulnerable bodies and families. And sooner or later, most people need significant medical care—because of a condition they develop or an infection they contract, or maybe because of a serious injury, like the kind somebody might get after driving in the mountains of Kentucky and hitting a patch of black ice.
