Here's The Deal on Health Care subsidies

Ralph Bristol

by Ralph Bristol, Facebook, Oct. 10, 2025- Republicans and Democrats are negotiating an amendment to the enhanced Obamacare subsidies as a condition of reopening the government. 

The Wall Street Journal reports: 

• Informal discussions have centered on extending enhanced Affordable Care Act subsidies temporarily, but with new guardrails meant to trim aid for higher-income families. One cutoff point that has been discussed among Democrats: limiting the subsidies to households at or below $200,000 of income, rather than leaving the benefit uncapped.

• Sen. Angus King (I., Maine), who caucuses with the Democrats, has dubbed his approach the “two and two”—a two-year extension of the subsidy capped at $200,000 of income. Sen. Mark Kelly (D., Ariz.) said that a cap would be hard to implement this year, but that discussions were occurring about reducing the subsidy by limiting the benefit to people earning above a certain percentage of the federal poverty line, with some members aiming for the $200,000 cap.

It’s not clear whether they mean they would cap it for an individual earning $200,000 or a family (a married couple) earning $200,000.  

Initially, Obamacare cut off the premium tax credits (subsidies for health insurance premiums) at 400% of FPL.  The “enhanced” credits eliminated that ceiling and increased the subsidies for all the other levels. 

Republicans and Democrats in the Senate have apparently agreed to find a new income ceiling to receive the credits and extend them for two more years.  I’ve heard nothing about changes to the other income levels.

The original Obamacare premium tax credits covered 75% or the population that was not receiving Medicaid, Medicare, or employer-sponsored insurance, all of which are subsidized by taxpayers.  The enhanced subsidies covered 100% of the population.  Initially, eligible people were required to get it, and fined if they didn’t. Republicans reduced the fine to $0 in the 2017 Tax Cut and Jobs Act, so while it’s technically still mandatory, there’s no penalty for not getting it. 

The enhancement also reduced the effective premium for those at 300-400% of FPL from 9.83% of their income to 8.5%, leaving those above 400% of FPL at 8.5%. 

If you are single and make $200,000, 8.5% of your income is $17,000 ($1,416/month).  That’s far above the unsubsidized cost of a Silver Plan ($500-$650/month) and about the same as the average unsubsidized Silver Plan for a family ($1,500-$1,700/month).  So, it seems like the argument is much ado about not much, but the enhancement also lowered the premiums for those making less than 400% of FPL.   Here’s the comparison.

FPL Range Original ACA (Pre-2021) Enhanced ARPA/IRA (2021–2025)

100–133% 2.07% of income 0% of income

133–150% 3.10–4.14% 0–2%

150–200% 4.14–6.52% 2–4%

200–250% 6.52–8.33% 4–6%

250–300% 8.33–9.83% 6–8.5%

300–400% 9.83% flat (cap) 8.5% flat (cap)

>400% No subsidy Capped at 8.5% of income (new eligibility)

The estimated total cost of the enhanced subsidies is $450 billion over 10 years.

Ralph Bristol is the former long-time morning talk radio host broadcasting on Supertalk 99.7 WTN. He was one of the less provocative and bombastic of conservative radio personalities, more thoughtful and grounded in conservative ideas. He left talk radio in 2018 and retired. He lives in Nashville. 

Rod's Addendum: For more on this topic, see, Who Gets Healthcare Subsidies Under the Affordable Care Act - WSJ, and Obamacare Will Survive This Election—The Fight Will Be About Paying for It - WSJ

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