Last week, the U.S. House of Representatives passed a continuing resolution (CR) that would fund the government through November 21. However, Senate Democrats blocked its passage, meaning government funding for discretionary programs may lapse at the end of the month. Democrats have released an alternative CR that would repeal the health provisions of the One Big Beautiful Bill (OBBB) and permanently extend Obamacare subsidies that were designed to address the COVID pandemic.
As Paragon has discussed, the OBBB curbs Medicaid waste and promotes accountability. During the Biden administration, projected Medicaid spending rose by $1.2 trillion over 10 years. The OBBB restores the program back on a more sustainable trajectory, reduces corporate welfare in the program, and refocuses Medicaid on the truly vulnerable. OBBB’s commonsense policies include preventing multiple states from enrolling the same individual in Medicaid and implementing community-engagement requirements for working-age, able-bodied adults who seek Medicaid. The Democrats’ alternative CR would also eliminate limits on financial scams that drive corporate welfare and the cap on Medicaid reimbursing providers more than Medicare rates. Over the past few years, this has become an increasingly common practice where states pay Medicaid two to three times what Medicare reimburses for the care of seniors.
In addition, Democrats’ CR would permanently extend the enhanced premium tax credits (PTCs) for Obamacare exchange plans. Democrats created these credits as a temporary pandemic measure. The COVID credits allowed many individuals to have their entire premiums subsidized by the federal government. Individuals do not directly see the subsidy because it flows from the government to health insurers. These “zero-dollar premium” plans have become a breeding ground for fraud. Our research reveals 6.4 million improper Obamacare exchange enrollees in 2025 at a cost of $27 billion.
Many leading congressional Democrats are suggesting that all the Obamacare exchange subsidies are set to expire after this year. This is patently false: the original Obamacare subsidies are permanent. And the permanent Obamacare subsidies are generous and expensive for taxpayers. When the COVID credits expire, most enrollees would have to pay less than $20 a week for coverage—with the subsidy covering the vast majority of the total premium. By intentionally conflating these with temporary COVID enhancements, some lawmakers are parroting the misleading rhetoric of outside special interests—insurers and advocacy groups—who profit from inflated subsidies while deceiving Americans about coverage risks. In a recent newsletter, I made the case for permitting the COVID credits to expire.
