How the federal government can fix rising healthcare costs

And joining us now is Mike Leon, entity News contributor and host of the podcast, Can We Please Talk. Also with us, Richard Stern, director of budget policy at the Heritage Foundation and a former budget adviser to House Speaker Mike Johnson. Gentlemen, good morning. Great to have you here. Thanks so much for coming on. Mike, we'll start with you. We know that some Democrats have come out against this deal because doesn't extend those uh federal health care subsidies. Why have the other Democrats moved forward with it anyway? Well, good to see you guys on this Wednesday morning. Well, I mean, the short answer is the Democrats that have moved forward in the Senate are not going to face any political fallout from this. None of them are on the ballot in 2026, as numerous outlets have reported and and and has been adnauseium said to me by Democratic strategists, right? Like, they're not going to feel the impact at the ballot box. So if you're going to have any Democrats that are going to come out and not, you know, till the the the party line and go along with Democrats and break and side with Republicans to get to the 60 threshold, it would be these Democrats that are not on the ballot. But in terms of what Hakee Jeff said there in the package that just played, you know, one of the big things, look, I I can speak to this just from personal experience, right? like lost my W2 job in 23, have, you know, used the Affordable Care Act and especially with some of the coverage benefits to be able to care for my daughter who's on the spectrum, right? Losing these subsidies, especially for somebody, let's say, that makes less money than me, Paul, is a is a huge thing that's going to be happening in 2026. The premiums are going to go up across the income thresholds. And you know that especially with the way unemployment is now in different sectors of the economy, this is tough. And I I get why Democrats stood the line on this and and and I get why there should be more attention drawn to this about the true health care crisis that we have, which is an affordability crisis in and of itself that people can't afford to pay for out-ofpocket procedures and insurance out of pocket if they don't get it from their employer. >> Right, Richard? On that point, for our viewers concerned about rising health care costs, we know Democrats say there will be a vote on extending those subsidies before they expire at the end of the year. But before then, is it inevitable as as Mike says that premiums will rise for people? >> So, I I think one of the things that's important to recognize here is that part of why premiums have gone up so much is because of the subsidies and the regulations that came along with them. So, you know, Obamacare and then this extended Obamacare that we had during CO layered on more money but didn't make it easier for there to be more supply. And so, it's driven prices up quite a bit. It's also the case that the regulations on these insurance products mean that mostly young workers with families are subsidizing procedures that frankly should have been more in the realm of Medicaid or Medicare. And so it's created an individual market that is hard for employers to deal with that is making it harder for employers to be outside of and is putting so much more of the overall burden of the healthare system on the workers we're talking about. And so the confluence of these is actually not good for workers. And we have to remember that the emergency subsidies that we're talking about here mostly funnel benefits to the welloff again at the expense of most low and middle inome workers. So look, I understand why Democrats are showboating on this frankly, but it's not a well-designed program and it certainly doesn't have the interests of most American workers at heart. >> So you think there's something more systemic here, not just throw more money at the at the problem? Richard, Richard, while I have you. Uh, this is something from the committee for responsible federal budget. I'm not sure if you saw it. They said that the bill, it's been called a CR, a clean CR, but the this this um nonpartisan group says the bill effectively codifies 3.4 4 trillion of new borrowing by wiping the pay as you go, the pay go scorecard, and provides for additional deficit increases until the end of the current Congress. I don't want to get into the weeds here, Richard, but it sounds like this bill is likely to get us into even more debt. Can you clear this up for us? >> Yeah. So, so what I would say is that this is kind of a wonky parliamentary thing in Congress that the tax cut bill earlier in the year would trigger some acrosstheboard cuts to welfare programs and a few other federal programs that frankly no one thought was going to happen that everybody was expecting that Congress would wave that so the automatic cuts wouldn't happen. That's what they're talking about. Now look, as much as I would like to see spending cuts, uh the truth is this was planned. And at the same time, I disagree with them. The deficits from tax cuts add to the burden on the American public. What creates a burden is government spending. By cutting taxes, you're not adding to the aggregate burden on Americans. You're shifting how that burden is felt. So I think they're being disingenuous to say that this is adding to the burdens of government on the American public. Mike, which party comes out of this shutdown better off politically? >> Oh, Paul, that's a great question. If I knew that, I I wouldn't be on this panel right now. I'd be flying in my helicopter somewhere to some private island. I I mean, look, there's two there's two ways to look at this, right? Tim Kaine has been doing the media rounds because he's been getting the most flak for this and I've seen him argue with some other hosts on some other networks and he said, "Look, I I've got over 500,000 federal employees that live in my district. If I if I can take care of them and extend SNAP and wick benefits for them a and get them back to work and get them back pay and guarantee that nobody will get let go going into the next, you know, three 3 months or so, January 30th when it expires, I'm going to take that deal. And I think the Democrats that came out against the party line, we want people to put country over party. We've been begging for people to put country over party. So, I get why they did it. And again, they won't face any consequence. Now, back to the overarching question, Paul, and this is the one thing I want to stress to everybody. Republicans in 2024 won the elections. They control the House, they control the Senate, they control the White House. Every Republican that I know and their mother has told me that a mandate was sent from the American people. Therefore, that means they have to govern. So, to label this a Republican shutdown, a Democratic shutdown, Republicans are in charge of the government. They're going through the same battles that Democrats went through with Kirstston Cinema and Joe Mansion not ending the filibuster. They could have done some of these things to reopen the government and start this process a long time ago. And the American people right now need to decide in 2026. Do they believe the Republican argument that the Democrats caused this because of the ACA subsidies or do they believe the the Democratic argument that hey, the Republicans are truly to blame for all of this because of them being in charge? It's going to play out in the ballot box very very soon in 2026. I don't think either of them have come out really too strongly from this, but we're going to find out soon. Maybe neither party. Mike, um Richard, on 2026, we saw that Republican Marjorie Taylor Green, she she criticized her party for what she said was just not taking people's healthc care cost concerns seriously enough. She said it's her constituents biggest issue. So, how will Republicans approach that issue perhaps before any potential vote on it uh later this year? Well, it would be nice to get some of the deregulation I was talking about, something that would actually allow health insurance products that are cheaper but give better service that are more tailored to the needs of middle and lowincome working families. But, you know, to be fair, the establishment of both parties don't always do the right thing. It's hard to know whether Republicans will sit down and actually put together the correct policies. But, you know, I do want to stress as well though, part of the problem here is that, you know, the truth, neither party has actually had full control over the government in many, many years because of the filibuster, which is a overt thing from the majority that allows 40% of the Senate, which Democrats have right now, and when Democrats control Congress, Republicans have to stop any vote in Congress. It's a way to respect minority rights within the Congress. But it does mean that as much as we say that one party might have a trifecta, no party actually ever truly controls all of the branches of government. But that does get in the way of being able to have decisive action to do things. So, you know, stay tuned as always, but it'll always be a compromised product. >> Absolutely. Uh Mike, through the shutdown, I've sensed that Democrats are, I don't know, intentionally or unintentionally focusing more on affordability and cost of living issues than before. Have you sensed that? And is that a winning strategy for them? >> I've sensed it. I've seen it. We saw it in the vote margin totals that happened in New Jersey with Mikey Cheryl and Jack Chidarelli. We saw it in the vote margin totals with Abigail Spanberger. Uh, we saw it with Zor with with Zoran Mandani as well in New York City. I mean, everyone gets asked a question during the Democratic primary there about where's their first trip and everyone picked Israel and he said, "I'm going to be here in New York City fixing this affordability crisis." That's the answer people want to hear. Whether or not he can actually solve that is a different story. But at least campaigning on it, grassroots effort, talking about the problem, saying, "Look, these are the types of things that I do want to implement that will make it more affordable around this city." Just taking Zoran as an example in isolation. Whether he accomplishes it or not is not the question because the question is for 6 months he campaigned on affordability. Affordability. Affordability. President Trump did the same exact thing. By the way, affordability 2019, this is what you were making. Are you feeling that right now? And the Biden economy, they just couldn't speak to the act. They kept giving the data without talking about the real impact Americans were feeling. It is a winning strategy, especially that voters are creatures of the moment. You can't look at voters anything other than the day of. You can't look at them in the future. You can look learn from them in the past, but you can't look at them in the future. They're creatures of the moment. You got to speak to the affordability crisis if we're going through the same things that we're going through right now in 2026. >> And Richard, to wrap up, President Trump, he hit the headlines over the past couple of days with his own affordability proposal. He he's pitched a a 50-year mortgage. You're a numbers guy. You're a budget guy. Uh what do what are your objective thoughts on a 50-year home mortgage for Americans? >> So, I think it's a little complicated because the question is, well, why don't we have them already? It's because of a mixture of government overregulation, but also that the government has subsidized mortgages in a way that I think ultimately has been unhelpful to most American families. So, because of the way the government does that, it would be nice to open up to have 50-year mortgages. However, it's critical that whatever the devil and the details are of that plan doesn't add to the malign government distortion subsidies, that'll make things worse and actually increase house inflation and make home ownership less affordable despite putting a label of a 50-year mortgage on it. So, the devils are in the details there. It could be a good proposal. It might be a very bad one depending on that. But you know I to me this stresses the other important part here which is that yeah everybody is messaging on affordability because people need it. People are suffering these burdens from government that make it harder to afford their own lives. But it's not enough to promise that you have to actually do policies that will do that. And frankly the more government spends the more it regulates. The larger government is the less and less affordable life is. That's what's happened over the last half century. You sound like you want to get your hands on me's chainsaw. Richard, Richard Stern and Mike Leon. Gentlemen, appreciate it. Have a good one. >> You too.