Shutdown fight won't lower health costs. Here's what will

AT THE HEART of the budget standoff that has shut down the government is Democrats’ insistence on extracting a laundry list of policy changes, including locking in the supposedly temporary, COVID-era expansion of Obamacare premium tax credits (or “Biden COVID credits”).

- VERONIQUE DE RUGY CONTRIBUTING WRITER

In essence, Democrats think the best way to lower healthcare costs is to direct more funding to insurance companies. This idea could not be more wrong. The credits are costly, poorly targeted and riddled with fraud, and do nothing to stop rising premiums.

Start with the price tag. Based on Congressional Budget Office (CBO) estimates, permanently extending the Biden COVID credits would cost about $410 billion over the next decade, including interest. Total spending over 10 years would amount to $488 billion. Funds would go straight to insurance companies to mask the real cost of coverage.

And let's be clear: Those insurance premiums are rising for reasons subsidies can’t fix. According to the Economic Policy Innovation Center's Gadai Bulgac, insurers themselves say individual-market premiums are on track to rise by roughly 18% in 2026, driven by the familiar culprits: soaring medical-care costs, nurse and physician shortages, expensive specialty drugs like Ozempic, an aging population, wider use of high-end diagnostics, new tariffs on pharmaceuticals and the lingering effects of inflation.

Independent reviews attribute well over half of this increase to medical-cost pressures alone, with roughly 20% tied to tariffs and other macroeconomic factors. None of that disappears if Congress continues mailing outsized checks to insurers. Subsidies don’t cut costs; they hide them, shifting the bill from plan enrollees to taxpayers while dulling consumer pressure to demand better value.