The GOP’s Obamacare Subsidy Hangover

Originally published on Substack. 

Washington has a famous trick: declare something “temporary,” then treat it as permanent the moment anyone depends on it. That’s exactly what happened with the turbocharged Obamacare subsidies created during COVID.

These subsidies dramatically expanded eligibility—pulling millions of middle-income Americans into a program never designed for them.

Now, according to The Economist, those temporary subsidies finally expire at the end of this month. And unless Congress acts, the Congressional Budget Office says 3.5 million people could lose health insurance coverage over the next few years.

Here’s the twist: Most of these people live in Republican-leaning states. The political panic is predictable. The policy drift is not.

The GOP spent 14 years arguing Obamacare was failing—and they weren’t wrong. But now the enhanced Obamacare subsidies that masked that failure are vanishing, and Republicans are scrambling for a response that doesn’t exist yet. Meanwhile, the Wall Street Journal warns we are “sprinting toward healthcare gridlock” with no unified strategy, no clarity, and no courage.

Washington didn’t design this cliff overnight. It built it over decades.

Healthcare Didn’t Break in 2010. It Broke Long Before.

One of the most important—and least understood—truths in American healthcare is this:

Obamacare didn’t break the system.

Government broke it long before Obamacare existed.

The original fracture was the employer-sponsored insurance tax exclusion, a WWII-era policy that encourages companies—not workers—to purchase health insurance because it’s tax-free for them but taxable for individuals.

That distortion alone ensures:

• Employers—not families—control the dollars
• Patients act like passive recipients, not consumers
• Insurers cater to HR departments, not individuals
• Plans are tied to jobs rather than people
• Prices spiral because no one sees the bill
• Bureaucracy expands to fill the gaps

Then came decades of mandates, regulations, price-setting, and federal micromanagement. By the time Barack Obama took office, healthcare looked less like a market and more like a Soviet supply chain with nicer formatting.

Obamacare didn’t fix the dysfunction—it cemented it:

• More subsidies
• More mandates
• More regulation
• Narrower networks
• Higher deductibles
• Premiums rising far faster than wages

Republicans are now discovering a painful political truth:

​When you let the government control healthcare, politics controls healthcare.

And political incentives always push in one direction: Expand subsidies now, deal with consequences later. Well—later has arrived.

The Real Problem Isn’t Expiring Subsidies. It’s the System They Prop Up.

Republicans are stuck because they’ve spent a decade critiquing Obamacare without uniting behind an alternative. Now the moment of truth is here, and the subsidy cliff is forcing them to choose between:

• extending a program they claim to oppose, or
• letting millions lose coverage without offering something better

Neither is politically stable. Only one is economically responsible. And that option requires courage.

There Is a Serious Plan: Empower Patients

This is why my work with Dr. Deane Waldman—a nationally respected physician and policy scholar—is so critical right now. Together, we developed Empower Patients, a free-market healthcare reform framework available today.

It’s laid out in our ATR policy blueprint:

👉 Empower Patients: A Plan to Fix Healthcare

The premise is simple:

Healthcare fails because patients don’t control the money.

Fix that—and you fix everything else.

Here’s what Empower Patients does:

1. Move the employer-sponsored tax benefit directly to workers.
Use it to fund a no-limit Health Savings Account (HSA) that patients—not employers—control.

2. Make insurance portable.
No more job-locked plans. No more losing coverage when switching employers.

3. Restore competition.
When patients shop, providers must earn their business. Prices drop. Quality rises.

4. Simplify federal rules and unleash states.
Replace Washington micromanagement with transparent markets and flexible regulation.

5. Support the vulnerable directly.
Low-income patients on Medicaid receive targeted assistance through their HSAs—not through bureaucratic rationing.
In short: Empower Patients shifts power from government and insurers to the people actually receiving care.

It’s bold. It would work. And voters would understand it instantly.

The Real Question: Do Republicans Have the Courage?

The GOP now faces a test of political character. Extend temporary subsidies? Let them expire? Pretend the cliff doesn’t exist? None of these solve the underlying problem.

Only one path does:

Give patients control of their healthcare dollars and let markets serve them—not bureaucracies.

Republicans don’t lack ideas. They lack conviction. If they want to lead, they must stop chasing poll-tested half-measures and start trusting free people to make choices for themselves.

The subsidy cliff isn’t a crisis. It’s a wake-up call.

Reality

Healthcare didn’t collapse because markets failed.

It collapsed because government replaced markets.

And this is the perfect moment for Republicans to do something they haven’t done in years:

Lead!

Empower Patients offers the roadmap. Now all we need is the courage to follow it.
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