See the False Framing in the Shutdown Fight

Democrats frame the fight over the government shutdown and a Republican refusal to keep funding health insurance subsidies as an attack on individuals:

Poor Bill and Shelly Gall — why are congressional Republicans being so mean to them?

The story Klobuchar links to does this remarkable thing, and read this carefully:

The Galls are among roughly 22 million ACA marketplace enrollees — about 92% of all enrollees — who face the prospect of higher premiums in 2026, according to KFF, a nonpartisan health policy research group.

Democrats are pushing Republicans to extend the enhanced subsidies that make enrollees’ health premiums cheaper, as part of a deal to end the federal government shutdown that began Oct. 1. Republicans have said they want to negotiate any extension of ACA subsidies outside of legislation that would reopen the government.

See the premise? Subsidies “make enrollees’ health premiums cheaper.”

They don’t. They make enrollees’ health premiums divided, splitting the cost between the person paying for the insurance and the taxpayers who fund the subsidy, but they flatly don’t make the premiums cheaper. It’s like you go to the supermarket and buy filet mignon, and it only costs you a dollar — wow, filet mignon is so affordable now! — but the supermarket bills the federal government for $25 every time you make that purchase, and the government gets the $25 from you as taxes. The thing costs what it costs. Subsidies don’t make it cheaper. They just hide the expense at the point of purchase. Subsidies shift and obscure.

Klobuchar: “Early retirees like Bill & Shelly will see their health insurance premiums increase nearly 300%—from $442 to $1,700 per month…” But the cost of their health insurance isn’t changing at all. What’s changing is who pays for it. And if Bill and Shelly pay taxes, they’re paying, at least in part, for their own subsidies. They’re taxed so that their taxes can be transferred to them as subsidies. What a remarkable game.

But then take it one more step.

Democrats frame the subsidy as a payment to Bill and Shelly, and don’t you want poor Bill and Shelly to have nice things? But the payment doesn’t go to Bill and Shelly. It goes to health insurance companies. It’s a subsidy to industry, allowing corporations to hide the cost of their product. It’s a federal gift to private corporations.

As the subsidies die (among other political changes), health insurance companies are talking about the market headwinds that they face: “trouble in the government-funded insurance sector.” The submarine warfare masked with photos of poor Bill and Shelly is over the explosive growth of healthcare spending as a share of GDP, and the attempt to hide it by paying for it in less-noticed ways. Here’s the big finish from a story this week about the poor recent performance of UnitedHealthcare stock:

Still, shares of UnitedHealthcare remain down some 35% in 2025 as the company struggles with rising medical costs and reimbursement cuts. And these pressures, in turn, reflect the deepest fault lines in the U.S. system, including a population that’s aging faster than the workforce paying for it, medical inflation that outpaces wage growth, and a financial model that assumes employers, taxpayers, and patients can endlessly absorb higher costs—even as the federal government shuts down amid an affordability fight.

The financial model assumes that taxpayers can keep paying more. The fight isn’t about Bill and Shelly. The fight is about a spectacularly unaffordable healthcare business model that relies on the federal treasury:

The federal government subsidizes health insurance for over 150 million Americans through various programs and tax benefits. The Congressional Budget Office (CBO) reports that in 2023, those costs and subsidies added up to $1.6 trillion, net of offsetting receipts, mainly from Medicare and Medicaid. A small portion of that spending — $91 billion, or 6 percent — goes toward subsidies for health insurance purchased through marketplaces established under the ACA and related spending.

The ACA subsidies are only $91 billion a year, though, so it’s practically nothing.

See also this 2023 CBO report, which projects explosive growth in federal healthcare costs over the next decade.

We’re not having a debate about giving money to Bill and Shelly so they can enjoy their early retirement. We’re having a debate about how much money the federal government — meaning you, if you pay taxes — is going to give to private corporations. Congressional Democrats are servicing their corporate clients.

“Lack of transparency is a huge political advantage.”