Democrats Make Pitch To Keep No-premium Obamacare Plans

Abortion restrictions may be the top sticking point in negotiations between Democrats and Republicans over a bill that would give enhanced Obamacare premium subsidies – which expired Dec. 31 – new life this year.

But there’s another obstacle close behind: no-premium plans that make coverage more affordable for the lowest-income customers.

Republicans argue that plans requiring no premium – referred to as “zero-dollar premiums” – invite fraud because they make it easier for unscrupulous brokers to sign people up without their knowledge, creating what are known as “phantom enrollees.”

Democrats are pushing back, expressing concern that lower-income people will drop coverage if the amount is raised – due to the extra administrative steps needed to pay or because they can’t afford even a small premium.

The concern, which is supported by several studies, is particularly acute in the 10 states that didn’t fully expand Medicaid because more lower-income people are dependent on the Affordable Care Act exchanges.

“We’re trying to see if we can get to a bipartisan landing on this,” Sen. Raphael Warnock (D-Ga.), who has been pushing lawmakers to oppose a minimum premium payment, told POLITICO last week. Georgia did not fully expand Medicaid.

It’s unclear, however, whether Democrats have enough leverage in the subsidies battle to keep the no-premium plans.

A clean three-year extension in the Senate appears unlikely, given that many Republicans are against reviving the enhanced subsidies. But some Democrats said the party has new sway after 17 House Republicans – more than expected – joined all Democrats last week in voting for a three-year clean extension of the enhanced subsidies.

“The Senate is in the position of tremendous strength,” said Rep. Pramila Jayapal (D-Wash.) a member of the Congressional Progressive Caucus, on Tuesday. “We set them up with the strongest bipartisan solution and that is a three-year extension.”

Jayapal said Democrats should not make concessions on the no-premium plans or the length of an extension.

“This is what the American people want,” she said, referring to the three-year extension. “We delivered them a big vote in the House and they should stick to it.”

Bipartisan talks on a subsidy deal led by Republican Sens. Bernie Moreno of Ohio and Susan Collins of Maine are continuing, but lawmakers are set to leave Thursday for a 10-day recess without any agreement on text.

Meanwhile, President Trump issued a healthcare plan on Thursday that does not extend the subsidies or address no-premium plans. It does call for adding money straight into health savings accounts which consumers can use to pay down out-of-pocket costs like deductibles or co-pays but not premiums.

Right now, the Senate debate over no-premium plans, along with abortion restrictions, is at the center of talks in Congress.

“We are all united in our opposition to fraud,” said Sen. Peter Welch (D-Vt.), one of the members in bipartisan talks last week. “There is some division on the minimum premium. That is something that Republicans really want.”

One option proposed by some Republicans is to raise the premium from zero to $5 monthly, or $60 annually, which they say would make it easier for people to comply.

“We think five-dollar premiums is a smart way to go,” Rep. Don Bacon (R-Neb.) said after a bipartisan and bicameral meeting on the subsidy deal last week.

While an annual premium might be easier to comply with, it may still be a lot of money for a lower-income American, said Cynthia Cox, senior vice president and director of the ACA program for the health research organization KFF.

KFF has estimated that premiums overall for subsidized enrollees will go up by $1,016 this year without the enhanced subsidies.

Apart from any financial burden, she said there is some merit to Democrats’ concerns about raising the premiums, even to just a few dollars.

“Low-income people may not have either the ability or comfort to set up a recurring payment,” said Cox. This issue “increases the chances of them missing a payment which increases the likelihood of coverage getting discontinued.”

There have been several studies that show forcing individuals to pay even a small amount could impact coverage.

A 2024 study looked at Massachusetts’ insurance marketplace from 2016 to 2017.

“Compared with plans that maintained [no] premiums, those that took on nominal premiums saw enrollment fall by 14 percent over the following year,” according to the study published in Health Affairs.

No-premium plans began with the Affordable Care Act, but the passage of enhanced subsidies by Democrats in 2021 meant that more lower-income Americans could get a plan without paying any premium.

With the enhanced subsidies people who earn between $27,000 and $40,000 a year for a family of three – or about 100-150 percent of the federal poverty level – could get a silver-tier plan with no monthly premium. The plans have lower out-of-pocket costs than bronze-tier plans, although co-pays and deductibles are still required.

There are no exact figures available on how many Americans on the exchanges do not pay premiums. The conservative think tank Paragon Health Institute has estimated that 10 million people have enrolled in no-premium plans since the enhanced credits were implemented in 2022.

The think tank has said the high number of no-premium plans have been a boon for insurers and brokers as they can enroll people without their knowledge because no bill is attached. Often, these “phantom enrollees” do not submit any medical claims throughout the year, Paragon researchers said.

The number of ACA enrollees with no medical claims jumped from 20 percent in 2021 to 35 percent in 2024, the think tank said.

Some experts have pushed back on Paragon’s analysis, noting that just because someone does not use their health care does not mean it is fraud.

Other estimates of the number of people who pay no premiums are lower.

The health technology company HealthSherpa, which helps people sign up for ACA plans, reported that it helped 6.1 million people sign up for 2024 coverage and 59 percent enrolled in a plan that doesn’t require a premium.

KFF has also estimated there were about five million uninsured individuals who are eligible for a no-premium plan in 2023. The Brookings Institution, a left-leaning think tank, estimates that around eight million people had no premiums in 2025.

Warnock has been explaining to Senate Republicans how doing away with the no-premium policies harms the states like his that did not expand Medicaid. He is also pushing for an estimate from the nonpartisan Congressional Budget Office on how many people could lose coverage due to the minimum premium payment, according to a source familiar with the talks who requested anonymity to speak freely.

Several Democrat-aligned groups such as the unions AFL-CIO and SEIU alongside advocacy groups Protect Our Care and others have been ramping up pressure on Democrats to avoid a minimum premium payment, the source said.

Warnock, fellow Georgian Jon Ossoff and Wisconsin’s Tammy Baldwin are the only Senate Democrats from states that have not fully expanded Medicaid.

More than half of the ACA enrollees in Georgia make between $15,000 and $20,000 a year and are enrolled in no-premium plans, according to Warnock’s office.

“That is a fundamental concern to me on how to figure this out,” he told POLITICO last week.