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The Biden COVID Credits, part of the American Rescue Plan Act of 2021, were created as temporary pandemic-era subsidies and are set to expire in 2025. These credits, paid directly to insurance companies, have been criticized for benefiting big insurance companies over patients, fueling fraud, and increasing taxpayer funding for abortion and gender transition procedures. Despite criticism, the original Obamacare subsidies will remain in place even if the COVID-era add-on subsidies expire, with taxpayers continuing to cover a majority of the premiums for enrollees.
Understanding the Biden COVID Credits: Temporary Pandemic-Era Subsidies
The Biden COVID Credits, established under the American Rescue Plan Act of 2021 (ARPA) as a response to the pandemic, are essentially an expanded version of Obamacare. These subsidies were made to be temporary and are expected to expire in December 2025 as per the Inflation Reduction Act (IRA).
Insurers Benefit More From Biden COVID Credits Than Patients
The Biden COVID Credits, much like Obamacare, are direct payments to insurance companies from the U.S. Treasury. In fact, these payments accounted for over $130 billion in 2025. Even in instances where enrollees made no medical claims, insurance companies received significant subsidies, allowing them to profit per enrollee without incurring any costs.
Fraudulent Cases In Obamacare Continues Under Biden COVID Credits
Obamacare has reportedly seen numerous instances of fraud, with an estimated 6.4 million individuals wrongfully enrolled in 2025, costing taxpayers $27 billion. A similar risk exists with the Biden COVID Credits, particularly impacting households claiming to be at the lower end of the federal poverty level.
Obamacare Premiums Set to Increase Despite Biden COVID Credits
Even with the Biden COVID Credits in place, Obamacare premiums are predicted to rise by an average of 18% in 2026. Increasing medical costs, labor shortages, high-cost specialty drugs, and economic uncertainty majorly drive this inflation, rather than the sunset of the Biden COVID Credits.
Biden COVID Credits Contribute to Funding For Abortions
Unlike other health programs protected by the Hyde Amendment, Obamacare and the Biden COVID Credits are not exempt, leading to an increase in taxpayer funding for elective abortions.
Biden COVID Credits Subsidize Gender Transition Procedures
With Obamacare and the Biden COVID Credits, taxpayer subsidies are available for a range of gender transition procedures, which include procedures for children and registered sex offenders.
Biden COVID Credits Eligibility Extended to High Income Households
The Biden COVID Credits have temporarily lifted the income cap on Obamacare, allowing households with incomes over $500,000 to receive these subsidies.
Taxpayers Cover the Full Cost of Obamacare Plans for Millions Under Biden COVID Credits
The expanded subsidies have fully subsidized Obamacare plans for 9 million individuals, or 42% of enrollees, transferring the entire cost onto taxpayers.
Projected Cost of Biden COVID Credits Exceeds Budgets of Some Federal Agencies
Over the next decade, the Biden COVID Credits are estimated to cost a total of $410 billion, including interest. This projected cost is thrice the budget of the Federal Bureau of Investigation and more than the combined budgets of the National Parks Service and U.S. Department of the Interior.
Obamacare Remains Even If Biden COVID Credits Expire
Even with the expiration of the Biden COVID Credits, the substantial original Obamacare subsidies will continue to be available for households that qualify under the original income thresholds and are properly enrolled. Therefore, the Obamacare structure will remain unaffected and taxpayers will continue to cover 80% of the premiums for a typical enrollee.
No Republicans Voted For Obamacare or Biden’s COVID Credits
Obamacare was enacted purely by Democrats in 2010 and similarly, the Biden COVID Credits were created and extended under the Biden Administration’s ARPA stimulus law and the IRA, respectively, with no Republican votes.
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