Looming health insurance spikes for millions are at the heart of the government shutdown

[umbertino]

 

By  ALI SWENSON and MARY CLARE JALONICK

Updated 8:45 PM CEST, October 1, 2025

 

 

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.

 

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.

 

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 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...............

 

 

 

 

 

 

 

 

 

 

 

https://apnews.com/article/health-care-subsidies-congress-shutdown-democrats-republicans-bb3464820a347fd2c0399e78e335881e