OPINION:
Earlier this month, the House of Representatives voted to restore tens of billions of dollars worth of “enhanced” Obamacare subsidies that expired in late 2025. Now, Senate lawmakers are negotiating whether to extend those subsidies with modifications.
Lawmakers seem to believe that funneling more taxpayer money into the Obamacare exchanges will improve care for Americans, but many older Americans are skeptical — and with good reason.
Obamacare infamously looted Medicare, stripping the insurance program for seniors of roughly $1 trillion, all while jacking up premiums and deductibles for Americans younger than 65, including those on the verge of retirement.
If Republican lawmakers want to truly lower costs and protect seniors and soon-to-be-seniors, they will need to stop endlessly subsidizing failure and instead hold insurers accountable for their outsized role in today’s broken health care system.
The latest push in Congress to extend Obamacare premium subsidies lays bare long-standing systemic problems. Although Democrats still sell these subsidies as relief for patients, in practice, they have become an ever-increasing revenue stream for health insurers.
Last year, insurers benefited from more than $135 billion in premium subsidies, even as they raised premiums and restricted coverage.
Millions of older Americans on the Obamacare exchanges suffer the consequences of that disconnect. What they pay month after month keeps rising. Yet insurers are tightening provider networks and imposing increasingly strict barriers, such as prior authorization and step therapy, to delay or deny patients access to treatments that doctors already know are necessary.
In 2023, insurers denied roughly 1 in 5 in-network claims on exchange plans.
Put plainly: Many older patients are paying more for coverage that’s increasingly unreliable precisely when they need it most.
That’s the predictable result of a system that shields insurers from real competition and rewards them for exploiting government programs rather than delivering better value. Subsidies don’t force insurers to lower prices or improve care; they paper over rising costs and lock in structural dysfunction.
Fraud and abuse remain widespread. Millions of people are signed up for exchange plans, often without their knowledge, that they never use. That means billions of taxpayer dollars are flowing to big insurers, with enrollees getting virtually nothing in return.
Similar incentive problems are evident in Medicare Advantage, which was designed to provide seniors with more high-quality coverage options while saving taxpayer dollars through competition. Today, though, insurers in the program are paid more than traditional Medicare would spend to cover similar patients, often on the order of 112% to 120% of what traditional Medicare would reimburse.
Over the next 10 years, those excess payments could add up to an estimated $1.2 trillion. A significant share of that gap is driven by insurers’ habit of inflating enrollees’ risk scores, essentially overstating patient diagnoses to boost payments. That ultimately means higher spending for both taxpayers and the seniors who pay monthly Medicare premiums.
It’s time to get Medicare Advantage back on track for the many seniors who rely on it. Proposals such as Sen. Bill Cassidy’s No UPCODE Act would help address the program’s distortions by tightening risk-adjustment rules and curbing overpayments. These changes could save roughly $124 billion over the next decade while preserving the program’s integrity.
At the pharmacy counter, meanwhile, another insurer-driven distortion affecting seniors is long overdue for correction. Pharmacy benefit managers, many owned by the nation’s largest insurers, decide which medicines are covered and on what terms. They extract enormous rebates and discounts from manufacturers yet rarely pass those savings to patients who need to fill prescriptions.
Republicans shouldn’t throw good money after bad by extending subsidies that reward higher costs, narrower networks and more denials. Taking on abuses across the insurance market — and restoring real competition — is the only way to meaningfully lower costs and deliver for seniors.
• Saul Anuzis is president of 60 Plus, the American Association of Senior Citizens.
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