WASHINGTON (AP) — The U.S. government shut down Wednesday, with Democratic lawmakers insisting that any deal address their health care demands and Republicans saying those negotiations can happen after the government is funded.
At issue are tax credits that have made health insurance more affordable for millions of people since the COVID-19 pandemic. The subsidies, which go to low- and middle-income people who purchase health insurance through the Affordable Care Act, are slated to expire at the end of the year if Congress doesn’t extend them. Their expiration would more than double what subsidized enrollees currently pay for premiums next year, according to an analysis by KFF, a nonprofit that researches health care issues.
Democrats have demanded that the subsidies, first put in place in 2021 and extended a year later, be extended again. They also want any government funding bill to reverse the Medicaid cuts in President Donald Trump’smega-bill passed this summer, which don’t go into effect immediately but are already driving some states to cut Medicaid payments to health providers.
Some Republicans have expressed an openness to extending the tax credits, acknowledging many of their constituents will see steep hikes in insurance premiums. But the party’s lawmakers in Congress argue negotiations over health care will take time, and a stopgap measure to get the government funded is a more urgent priority.
Health insurance rates will skyrocket for millions without congressional action
A record 24 million people have signed up for insurance coverage through the ACA, in large part because billions of dollars in subsidies have made the plans more affordable for many people.
With the expanded subsidies in place, some lower-income enrollees can get health care with no premiums, and high earners pay no more than 8.5% of their income. Eligibility for middle-class earners is also expanded.
When the tax credits expire at the end of 2025, enrollees across the income spectrum will see costs spike. Annual out-of-pocket premiums are estimated to increase by 114% — an average of $1,016 — next year, according to the KFF analysis.
Millions expected to lose Medicaid coverage without changes to Trump’s big bill
Republicans’ tax and spending bill passed this summer includes more than $1 trillion in cuts to Medicaid and food assistance over the next decade, largely by imposing new work requirements on those receiving aid and by shifting certain federal costs onto the states.
Medicaid’s programs, which serve low-income Americans, enroll roughly 78 million adults and children. The nonpartisan Congressional Budget Office projects 10 million additional Americans will become uninsured in the next decade as a result of Republicans’ law, between Medicaid and other federal health care programs.
Democrats want to roll back the Medicaid cuts in any government funding measure, while Republicans have argued that cuts are needed to reduce federal deficits and eliminate what they say is waste and fraud in the system.
Democrats say health care can’t wait
Democrats have insisted an extension of the health subsidies needs to be negotiated immediately as people are beginning to receive notices of premium increases for next year.
“In just a few days, notices will go out to tens of millions of Americans because of the Republican refusal to extend the Affordable Care Act tax credits,” House Democratic Leader Hakeem Jeffries said Tuesday on the steps of the U.S. Capitol.
He added the higher health care costs millions of Americans are facing are coming “in an environment where the cost of living is already too high.”
At the White House on Monday, congressional Democratic leaders shared their health care concerns with Trump. Senate Democratic Leader Chuck Schumer said after the meeting that Trump “was not aware” that so many Americans would see increases to their health care costs.
Republicans call for stopgap funding first, and a negotiation later
Republican leaders say they handed Democrats a noncontroversial stopgap funding measure and argue that Democrats are instead choosing to shut the government down.
“We didn’t ask Democrats to swallow any new Republican policies,” Senate Majority Leader John Thune said after Tuesday’s failed vote. “We didn’t add partisan riders. We simply asked Democrats to extend the existing funding levels, to allow the Senate to continue the bipartisan appropriations work that we started. And the Senate Democrats said no.”
Republican leaders have offered to negotiate with Democrats on ACA health insurance subsidies — but only once they vote to keep the government open until Nov. 21.
“I will go to the Capitol right now to talk to Chuck Schumer and Senate Democrats about premium support for the Affordable Care Act, but only after they’ve reopened the government,” Vice President JD Vance said Wednesday on Fox News.
That might be easier said than done, with many Republicans in Congress still strongly opposed to extending the enhanced tax credits.
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Swenson reported from New York.
