At the heart of the government shutdown fight is a dispute over extending expiring subsidies that help people buy health insurance under the Affordable Care Act.
Democrats are demanding that Republicans renew the tax breaks that help pay for the coverage, which are set to expire at the end of the year, as part of any funding extension to reopen the government.
Republicans, so far, have said such an extension does not belong on a spending measure, and some have argued that Congress should let the subsidies expire.
Here is a look at the debate.
The subsidies reduce health insurance costs.
The tax credits in question help Americans who don’t get coverage through work, Medicare or Medicaid afford health insurance.
They were a core provision of the law known as Obamacare, enacted in 2010, which aimed to offer subsidies that adjusted with people’s incomes. But in 2021, President Joseph R. Biden Jr. and Democrats made the subsidies far more generous. Since they did, enrollment in Affordable Care Act insurance has more than doubled, with huge enrollment gains in red states, especially Florida, Texas and Georgia.
Democrats extended the policy in 2022, but made the program temporary. Without congressional action, the extra help will expire at the end of the year, effectively hiking insurance premiums by more than 100 percent for the average consumer in the market, according to an analysis from the health research group KFF.
Democrats argue it’s urgent to extend the subsidies.
Democrats have made renewing the subsidies a key condition of their support for a government spending measure. They argue that Congress must act urgently to prevent millions of Americans from losing coverage and millions more from seeing their premiums spike.
Estimates vary a bit, but the Congressional Budget Office expects around 2 million more Americans to become uninsured next year without the subsidies, and 3.8 million over a decade. Other researchers have estimated an even larger impact, expecting that millions of Americans will drop health coverage in the face of higher premiums.
The potential effects vary vastly depending on where people live, how old they are and what they earn. A single 28-year-old earning around $22,000 a year would see their premium increase from $0 a month to $66. A 60-year-old earning around $65,000 in Key West, Fla., would see an increase from $460 a month to $2,400.
And while the tax credits do not expire until Dec. 31, Democrats say action is needed much more quickly. The shopping period for Obamacare plans begins on Nov. 1. If an extension isn’t passed by then, many people could shop for insurance, face sticker shock and move on.
Four states have already opened up their insurance marketplaces for “window shopping,” meaning some consumers are already seeing the higher prices they will face if the subsidies expire.
Depending on how many people drop insurance because of premium hikes, the change could have ripple effects in the markets themselves. Insurers would likely charge even higher prices for those remaining, and some companies might choose to exit the Obamacare markets if they shrank too much.
Republicans are split.
Many Republicans revile Obamacare, and do not wish to prop up markets created under the law. Extending the subsidies would also be expensive, costing around $350 billion over a decade, according to the budget office.
Conservative critics have argued that the pandemic-era subsidies are so generous that they have encouraged fraud. There is evidence that brokers enrolled some people without their knowledge, but the magnitude of the problem is highly disputed. Some Republican lawmakers have said the program should not be available to those with high incomes.
Critics of the subsidies also have noted that the funding doesn’t actually lower the cost of health insurance, which is high and rising; it just shifts more of it to the federal government.
Still, before Democrats chose to shut the government down over the subsidies, some Republicans in Congress had been publicly expressing support for an extension. Ten House Republicans in competitive districts introduced legislation that would extend the funding for another year. Senator Lisa Murkowski, Republican of Alaska, introduced a bill to extend them for two years.
Other Republicans, including some who are generally considered less moderate, have also signaled support for the policy. Senators Dan Sullivan of Alaska and Tommy Tuberville of Alabama have said the subsidies should be extended. Senators Mike Crapo of Idaho, James Lankford of Oklahoma and Shelley Moore Capito of West Virginia have signaled openness to doing so. And on Monday, Representative Marjorie Taylor Greene, the right-wing Republican from Georgia, wrote on X that she was “disgusted” that premiums for her adult children would double without action.
As recently as a few weeks ago, Speaker Mike Johnson of Louisiana and Senator John Thune of South Dakota, the majority leader, had also declined to rule out a subsidy extension. But both say such a measure does not belong on a government funding bill.
President Trump has expressed some openness to the idea, saying on Monday that he would negotiate on the subsidies.
“I’d like to see a deal done for great health care,” he said. But he later posted on Truth Social that such a negotiation could only come after Democrats allow the government to reopen.
The dispute impacts more than 20 million Americans.
The subsidies help Americans who don’t get insurance from their job or a government program and buy it for themselves or their families in state marketplaces or on Healthcare.gov. More than 23 million Americans are currently enrolled in that type of insurance, but that group shifts every year as people’s income and employment change. Undocumented immigrants are ineligible for the subsidies, regardless of income or employment status.
Some people in the market work in low-wage or gig jobs that don’t offer health insurance. Others are entrepreneurs who run their own businesses or early retirees who need coverage until they become eligible for Medicare at age 65.
The wide variation in recipients may be one reason that polls show lopsided support for a subsidy extension, even among Republicans.
Before the shutdown, few Americans knew much about this issue. It barely came up during the 2024 presidential race, and the tweaks to a subsidy formula are a bit wonky and technical to understand.
But when surveys ask voters what they think about the policy, they tend to overwhelmingly support an extension of the subsidies.
A recent survey from KFF showed that more than three-quarters of adults, including 59 percent of Republicans, thought Congress should extend the subsidies. But it also showed that nearly two-thirds of people had heard “little” or “nothing at all” about the issue.
Margot Sanger-Katz is a reporter covering health care policy and public health for the Upshot section of The Times.
The post What’s Behind the Dispute Over Extending Health Care Subsidies appeared first on New York Times.
