In Focus delivers deeper coverage of the political, cultural, and ideological issues shaping America. Published daily by senior writers and experts, these in-depth pieces go beyond the headlines to give readers the full picture. You can find our full list of In Focus pieces here.
For over 15 years now, Republicans have run for office on the promise to repeal Obamacare. And for over 15 years now, they have either failed or lied. But in the final days of 2025, the GOP may finally, at minimum, let it begin to defund itself.
The good news for fiscal sanity is that, unlike past botched bids to scale back Obamacare, this once-in-a-lifetime opportunity requires Republicans to do literally nothing but wait out the clock. The bad news is that this requires both the GOP and President Donald Trump not to chicken out and cower to the emotional terrorism of Democrats who understand that 2026 may mark the beginning of Obamacare’s natural death spiral.
NOT ONE MORE TAXPAYER DIME TO BAIL OUT THE (UN)AFFORDABLE CARE ACT
On paper, former President Joe Biden‘s expiring, enhanced Obamacare subsidies are a rounding error on the government’s balance sheet, both a measly fraction of the federal government’s $6 trillion annual spending and of the $2ish trillion in annual healthcare spending. Biden passed the original enhanced Obamacare subsidies specifically as an emergency response to the 2020 coronavirus pandemic in the form of the 2021 American Rescue Plan. The enhanced subsidies, which were originally due to expire by the end of 2022, were then extended through 2025 by the president’s 2022 reconciliation bill. By the end of this year, per Biden’s handwritten orders, these COVID-19 emergency enhanced subsidies are finally due to terminate, a full five years after the COVID-19 vaccines hit the market.
The pandemic is long over, and the federal government will continue to shovel taxpayer dollars to the insurance conglomerate by the trillion-dollar load.
But Democrats know that a failure to bail out Obamacare will burst the bubble of the party’s own creation.
Until Biden took office, the number of people enrolled in Obamacare marketplace plans held roughly constant at around 12 million. Since the 2021 ARP, enrollment has more than doubled to over 24 million people, with the number of Obamacare customers earning more than 400% of the federal poverty line — mind you, that is a six-figure income for your average household — quadrupling. In 2024, half of this 24 million and 40% of those paying zero dollars for coverage made zero insurance claims, but for these patients who did not even use their insurance, taxpayers paid at least $35 billion to the insurance cartel.
If that smells like fraud, that’s because it is. According to a blockbuster investigation by the Government Accountability Office, the government approved the Obamacare marketplace enrollment of 100% of applicants using fraudulent Social Security numbers, paying more than $13,000 per month to insurers on behalf of each fraudulent Obamacare “patient.” The GAO’s finding pairs with the Paragon Institute’s discovery that over 6 million Obamacare customers improperly enrolled by fraudulently claiming income between 100% and 150% of the federal poverty line threshold, with taxpayers giving insurers $27 billion on behalf of these patients. Thanks to the perverse incentive structure of the enhanced subsidies, nearly half of all Obamacare customers are fully bankrolled by the taxpayer.
Again, allowing these subsidies to expire should be an obvious choice for sound fiscal stewards of either party. Should the enhanced subsidies expire, the premiums paid by households at the federal poverty line — $32,150 annually for a family of four — will rise from zero to about 2% of their monthly income, about $55 per month. For a family of four earning more than four times the FPL, or at least $160,000 each year, losing the enhanced subsidy would increase payments by nearly $3,000 per year, or five times as much as for the family living at the poverty line. Only 7% of the country is even enrolled in Obamacare, meaning that the national impact should be minimal.
And yet, Democrats aren’t acting like that.
Obviously, the party staked the longest government shutdown in the nation’s history on extending the subsidies. And now, Senate Minority Leader Chuck Schumer (D-NY) has demanded a three-year rubber stamp on continuing the subsidies with zero reforms or limitations through 2023. The nonpartisan Congressional Budget Office estimates Schumer’s plan would add another $83 billion to the deficit by the end of this decade. For reference, that’s more than what we spend on the Environmental Protection Agency in three years and more than we spend on Customs and Border Protection and Immigration and Customs Enforcement combined.
Schumer’s bill died in the Republican-controlled upper chamber, but not without a galling number of Republican support. Sen. Susan Collins (R-ME), who represents the indigo-blue Maine, may have the political rationale to support refunding Obamacare, but Sens. Lisa Murkowski (R-AK) and Dan Sullivan (R-AK), whose home state Trump won by 13 percentage points last year, and Josh Hawley (R-MO), whose state the president won by 18, have no such excuse.
So why the disconnect between the nominal effect of a scheduled expiration of emergency subsidy enhancements and the apoplexy from Democrats and RINOs? Likely because the expiration will expose the farce that is the Unaffordable Care Act to be exactly that.
The pre-Obamacare healthcare system was far from perfect for largely the same reason that the current healthcare system is not perfect: the employer-sponsored health insurance model that was created as a product of President Franklin Roosevelt’s price controls removed consumer choice and rationality from the broader healthcare market. However, the one aspect that worked incredibly well was insurance for individual buyers, such as self-employed workers. Reasonably healthy people could purchase high-deductible but ultralow-premium plans that served as robust catastrophic health insurance.
The problem that former President Barack Obama wanted to solve was subsidizing healthcare for unhealthy patients who didn’t actually need to be insured against any real risk. Just like with every other failing entitlement in the nation, Obamacare then required the young to subsidize the old, as young patients were to be charged no less than one-third of what a plan charges an elderly patient. Obamacare effectively doubles what young individual consumers paid for health insurance so that older and unhealthier people pay less for healthcare. Prices are no longer responsive to demand or risk, making the market for health insurance no longer a market or one for insurance against a risk.
Obamacare’s historic workaround for this adverse selection problem was the individual mandate, which forced healthy consumers to buy healthcare plans that weren’t worth the cost. Trump’s Tax Cuts and Jobs Act repealed the individual mandate, forcing Democrats to rely on its second strategy to coerce healthier consumers back into Obamacare risk pools: the enhanced subsidies.
Without the subsidies, one-third of Obamacare customers polled by the Kaiser Family Foundation say they will downgrade to lower-premium plans, and a quarter say they will exit the Obamacare marketplace entirely. Liberal economists and Democrats warn this will doom Obamacare to a death spiral of mostly unhealthy patients driving up insurance costs to exorbitant levels.
And that’s because it likely will.
There is no point in saving Obamacare, and luckily for Republicans, Trump may get the party to work around the entire broken insurance industry altogether. House Speaker Mike Johnson (R-LA) will bring for a vote a GOP proposal that would legalize and expand private association health plans outside of the traditional employer-sponsored model and the Obamacare marketplace, a reform of pharmacy benefit managers, and some cost-sharing reductions. Sens. Bill Cassidy (R-LA) and Mike Crapo (R-ID) have also proposed a bill to redirect the expiring Obamacare subsidies into separate health savings accounts with Medicaid offsets that the Committee for a Responsible Federal Budget estimates would save at least $20 billion over the next 10 years.
In the long run of Trump’s tenure, a comprehensive bill to continue to liberalize actual healthcare away from its dependence on the employer-sponsored model and work around insurance entirely would prove a noble and overdue goal.
But in the short run, all Republicans have to do is nothing. If they can’t actually repeal Obamacare, the least the GOP can do is let it begin to defund itself. After all, these are indeed the terms the Democrats dictated.
