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The fight in Washington could leave millions paying double for the same health coverage.
At the center of the shutdown standoff are Affordable Care Act (ACA) subsidies, the tax credits that lower monthly premiums for most marketplace enrollees. Congress first expanded these enhanced subsidies under the American Rescue Plan and later extended them through the Inflation Reduction Act. But they are set to expire at the end of this year unless lawmakers act.
The Congressional Budget Office projects that if these enhanced ACA subsidies expire at the end of 2025, about 2.2 million people would lose coverage in 2026. Those who remain insured would face premiums that rise nearly 8% over the next decade.
Put simply, most people who buy insurance on the ACA marketplace don’t pay the full sticker price. The government pays part of their monthly bill directly to the insurer, and consumers pay the rest. For some households, that drops the cost of coverage from several hundred dollars a month to less than $100, and in some cases, even $10.
Premiums reflect the average for a 30-year-old woman who is a nonsmoker for the three lowest quotes in these cities: Orlando, Florida, Phoenix and El Paso, Texas.
Premiums reflect the average for a 30-year-old woman who is a nonsmoker for the three lowest quotes in these cities: Orlando, Florida, Phoenix and El Paso, Texas.
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Democrats want to extend the subsidies permanently. Republicans want to move forward with a short-term spending bill, known as a continuing resolution, without attaching health policy changes, and discuss subsidies at a later time.
Josh Schultz, head of government affairs at Softheon, a healthcare technology company, notes that the marketplaces will not shut down. HealthCare.gov and state exchanges are funded outside congressional appropriations.
“Enrollment platforms and insurer participation won’t stop,” he says. But that does not shield families from sticker shock.
Without subsidies, premiums for middle-class households could rise by several hundred dollars a month, and younger people are likely to drop coverage.
For example, according to the KFF, a 22-year-old earning the median salary of about $45,000 a year would see a sharp difference in premiums depending on whether enhanced subsidies continue.
- With enhanced subsidies: They would receive about $182 a month in assistance, or $2,187 a year, covering nearly half the cost of a standard “silver” marketplace plan. Their monthly premium for that plan would be about $206, or 5.5% of their income. A lower tier “bronze” plan would cost about $116 a month, or just over 3% of their income.
- Without enhanced subsidies: The same person would get only $29 a month in tax credits, or $351 a year. Their monthly cost for the silver plan would jump to $359—nearly 10% of their income. Even a bronze plan would climb to $269 a month, more than 7% of their income.
What the Parties Are Fighting Over
The fight intensified earlier this year when Republicans passed the One Big Beautiful Bill Act, which restricted ACA and Medicaid eligibility for certain legally present immigrants, including refugees, asylum seekers and visa holders. Democrats are pressing to reverse those restrictions and lock in subsidies permanently.
Republicans argue the subsidies represent an expensive expansion of government and that tighter eligibility rules will reduce federal spending. Rep. Vern Buchanan, chair of the U.S. House Committee on Ways and Means Subcommittee on Health, says reforms are needed to “end billions in subsidies for illegal immigrants and crack down on fraud,” framing the effort as a way to save taxpayers money and lower premiums.
Democrats counter that letting subsidies lapse amounts to a tax increase on middle-class families.
Cybil Roehrenbeck, who leads the healthcare lobbying practice at global law firm Hogan Lovells, says Democrats have limited leverage in tying ACA subsidies to the shutdown.
“The ACA subsidies argument is thin because they don’t expire until the end of the year,” she says. “The deal presently on the table is a short-term continuing resolution, which would create time to negotiate these other items.”
She adds that Republicans are unlikely to roll back provisions of a law they recently passed, such as the new $50 billion fund for rural hospitals.
“Parties don’t tend to accept a repeal of a law that they’ve just only passed a few months earlier, especially when they’re in the majority,” Roehrenbeck says.
The rhetoric around immigrants has added to the political charge.
President Donald Trump and other Republicans have claimed that immigrants in the country illegally are receiving Medicaid.
Health policy experts emphasize this is not the case. Undocumented immigrants are not eligible for federally funded Medicaid. What they can access is Emergency Medicaid, which reimburses hospitals for urgent care they are required to provide.
Patti Boozang, a partner at Manatt Health, a healthcare law and consulting firm, says affordability remains a defining issue.
“Voters care more about keeping their healthcare affordable than about the size of government,” she says.
A bipartisan poll from the American Cancer Society Cancer Action Network reinforces that point, showing 78% of voters support making ACA subsidies permanent, and 8 in 10 say access to affordable coverage is a vote-deciding issue.
For now, the outcome depends on Congress, and millions of Americans will be watching to see if their health coverage stays affordable.
6 Smart Moves if Coverage Gets More Expensive
1. Peek at your subsidy status now.
Don’t wait until the last minute. Log in to HealthCare.gov or your state exchange to see whether your credits are changing during open enrollment.
2. Shop around like it’s Black Friday.
Plans can look similar, but differences in deductibles, copays or provider networks could save you hundreds.
3. Check if Medicaid or CHIP has your back.
Rules vary by state, and more families qualify than you might think, especially kids. You can check eligibility and apply anytime through HealthCare.gov, your state marketplace or directly on your state’s Medicaid or CHIP website.
4. Don’t forget your job’s plan.
If you have access to workplace coverage, compare total costs. Sometimes the payroll deduction beats the marketplace premium.
5. Use tax-free dollars.
Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) help stretch your budget by letting you pay medical expenses with pre-tax money.
6. Call in a guide.
Certified health navigators and licensed brokers are trained to walk you through your options, and their help is free. To find them, start at HealthCare.gov and use the “Find Local Help” tool, which lists navigators and brokers by ZIP code.
Legitimate navigators are funded or approved by the federal or state marketplace, and licensed brokers must be registered with your state’s insurance department. If someone asks you to pay upfront or pressures you to buy a plan off the marketplace, that’s a red flag.
