Georgia Makes ObamaCare Less Irrational

ObamaCare is a mess, and Congress has failed to clean it up. When open enrollment for 2027 started Sunday, enrollees faced another year of increased premiums and deductibles. The increases stem from structural flaws in the Affordable Care Act's funding system, which have driven up the cost of benchmark silver-tier plans and caused price distortions in the Affordable Care Act marketplace. Meantime, taxpayers are on the hook for ever-higher subsidies to offset the rising costs of coverage. But states have the ability to address this problem. Georgia is showing what policy innovation looks like.

ObamaCare provides two main subsidies: premium tax credits, which lower monthly insurance premiums, and cost-sharing subsidies, which go toward deductibles, copayments and out-of-pocket expenses for eligible low-income enrollees in silver plans. Premium tax credits are directly tied to prices, so when insurers raise prices, the subsidies rise with them and taxpayers foot the bill. But because the money goes directly to insurers, enrollees can't use any portion of the subsidy to offset other spending like prescription costs or copayments.