Interview transcript

Terry Gerton So as we speak, the main topic that generated the last government shutdown, the Affordable Care Act subsidy extension, has expired and we’re potentially looking at a partial shutdown again just at the end of this month. Talk to us first about what the expiration of the subsidies means for Americans.

Carolyn Bordeaux So yes, it’s a very intensely felt issue among some big sectors of the population. What people need to realize is there were two subsidies. You have the standard credits that were originally adopted as part of the Affordable Care Act. Those continue to be in effect. But what expired on Dec. 31 was the enhanced subsidies that were passed as part the American Rescue Plan and then renewed in the Inflation Reduction Act. And those ensure that no one had to pay more than 8.5% of their income for health insurance. And these are people who are purchasing health insurance on the exchange. So a very distinct subset of the American population, but this is people who are small business owners, who are self-employed, that kind of universe of folks. And just to give you one day-to-day example in my life, the woman who does my hair, right? She and her husband purchased health insurance on the Exchange. And what, you know, who is affected by this lapse is people like my hairdresser. It is, she is in that 55 to 65 age range. These are folks who tend to pay higher premiums for health insurance. And they are the ones that, and they’re not super wealthy, right? They kind of fall into sort of that middle range, $65,000 to, you now, maybe over $100,000 a year, but folks like that are seeing their insurance premiums double or even triple in some cases.

Terry Gerton And it’s happening in real time. Is that correct?

Carolyn Bordeaux That is correct, yes. So this went into effect during open enrollment and really the debate at the end of last year was whether they would be able to make changes. Now, there may be further debate coming up in the coming days here, but it has expired and so people are now, starting this month, are going to be paying those higher premiums.

Terry Gerton So Congress spent a lot of time on this topic at the end of the year, three months, really debating it back and forth. From your perspective, what were the sticking points? Why couldn’t they find some way forward?

Carolyn Bordeaux First, from Concord’s perspective, I just want to point out that this is expensive. It is give or take, depending on how it’s structured, around $30 billion a year. What Democrats put on the table was not only the enhanced premium subsidies, but also removing a number of cost-saving measures that passed as part of the One Big Beautiful bill back earlier in 2025. So their proposal, which is a three-year extension, cost $300 billion over the next three years. So there are a lot of really big cost issues out there around this. There are some pretty reasonable ways, into my mind, to pay for it. But of course, whenever you put a pay for on the table, then that opens up another political fight. But a lot of folks like Concord and the Committee for Responsible Federal Budget had suggested things like site-neutral payments in Medicare could be a way to pay for this, stopping Medicare up-coding. Those are all ways that would probably more than pay for the enhanced premium credits. So we were interested in some kind of pairing of those two to get it done. However, you know, there were a number of people who were like, wait, it’s not paid for, and a lot of the proposals put on the table, that was one sticking point. And then what’s very interesting is, I talked to members of Congress about this, and some members’ districts are more heavily affected than others by it. Some districts have more people who are purchasing health insurance on the exchange, whereas other districts, people are more likely to get employer coverage on Medicare, have government coverage, and so there is a lot of disparity over who is really being affected by this when you look at the sweep across the country.

Terry Gerton I’m speaking with Carolyn Bordeaux, former member of Congress and currently executive director of the Concord Coalition and Concord Action. Carolyn, you talked about some of the options to pay for this. Why is it so difficult to get agreement on those if reasonable people think that they’re reasonable options?

Carolyn Bordeaux I personally think that there are lots of great options here to pay for it. I think it would not have been that hard for them to just extend it for a year or two, pay for, it and then work on fixing the premium tax credits. So one of the challenges is, while it is very important for bringing down people’s health insurance costs, right, there’s a very real human cost on the other side these things. Really what they’re doing is papering over the cost of rising health insurance. So it’s basically saying you don’t have to pay more than 8.5% of your income in health insurance if you’re purchasing it on the health insurance exchange. But what’s been happening is insurance companies are like, oh, well, great. I can raise premiums more and more and more, you as a customer are protected because the federal government will step in and cover any additional costs. So, it’s not a particularly good policy way to bring down the costs of insurance premiums, which is what we really need to do. And we were just talking about what some of the objections were to it, and those were also some of objections, that the underlying policy is not a really good policy. We really should find other ways to bring the cost of health insurance.

Terry Gerton Folks have been facing rising health care costs for a while. It far exceeds the pace of inflation. So talk us through the fundamental policy changes that would really restore sort of a balance to health care cost for people across the country.

Carolyn Bordeaux Well, originally when the Affordable Care Act passed, there were a number of provisions in there to try to bring down the costs of health insurance across the board. A lot of those ended up getting knocked out for various reasons. One of them was, of course, the individual mandate. Because if you have an insurance pool, you need for everybody to be chipping in a little bit so that you’re spreading the risk over the broadest population possible. So that was one thing that got knocked out. There was another piece, which was called cost-sharing reimbursements. Actually, there is legislation that — likely to pass the House, but probably won’t make it through the Senate — that would restore cost-sharing reimbursement. It’s a bit complicated, but to try to briefly explain it, what it was funding. So, insurers are not allowed to charge more than a certain amount on copays. So you go into the doctor, you make a payment, your insurance will cover 50% of that visit or 30% or whatever that is. Under the Affordable Care Act, there were certain restrictions that if you were poor, you didn’t have to pay X amount in copayment. There were certain restrictions around that. And then there was funding on the back end to cover the insurance companies’ loss. What happened was that funding was pulled out. However, the requirement that the insurance companies still cover a share of the copay was kept in place. So what did the insurance do? Well, they pass that cost on to the consumers in the form of higher premiums. So that’s another place. There are many little examples like that. There were various insurance risk pools for high-risk people that were in place and a lot of these things got pulled out of the Affordable Care Act and really need to be put back one way or another if we’re going to start addressing the costs of health insurance and there are probably a number of other great ideas out there as well to try to tackle that problem.

Terry Gerton So these are complicated policy discussions on the first hand, and they also have a lot of constituencies on the second hand. So, as Congress gets back up to speed at the beginning of this year, what are your expectations for an effective policy negotiation that might help resolve some of these issues and bring down the cost of health care without, as Concord is so concerned about, adding to the national debt?

Carolyn Bordeaux Yes. So this is, I have to say, health care and health insurance is something that just has bedeviled this country for many decades now. And we need to start thinking about more effective ways to address it, to do it. One of the largest drivers of costs going forward, things that are really going to expand the deficit and add to our really staggering national that are a lot of those healthcare and health insurance costs, particularly as they are in Medicare, and to some degree in Medicaid. So there are huge menus of options out there to try to bend the cost curve on health insurance. And we do need to tackle that in a comprehensive way. Given our current level of dysfunction, I am not seeing that happening. I think from Concord’s perspective [it] is, you know, just step one, we would like to see Congress create a fiscal commission, ideally composed of members of Congress as well as people from the outside to sit down and to start charting a path forward. And part of that path forward is going to have to involve some forms of health care reform to bring down costs.

Terry Gerton I was just going to ask you what your prognosis is for broader fiscal reform. What does this particular discussion tell you about the broader ability of Congress to tackle all of the kinds of issues that have to be addressed in order to deal with the debt?

Carolyn Bordeaux Well, we saw the meltdown that happened at the end of last year. We are coming up on the end of the continuing resolution at the of January. And Congress is really struggling. The House and the Senate, of course, are very fine margins within each party. There are a lot of fissures and fights going on. So it is really hard to see how they do much that is constructive until we kind of re-center ourselves as a country. My hope is that they will move quickly on some kind of omnibus appropriations bill and that they would put into that the fiscal commission legislation so that they can at least get started on a path to reducing the debt and deficit. And it is getting to the point where many economists are really saying this is going to be, getting our debt under control, it is going to be extremely important for our economic health in the years to come, and so it is my hope that they’ll start taking some positive steps, at least get that commission moving.

 

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