Looming health insurance spikes for millions are at the heart of the
government shutdown
[October 02, 2025]
By ALI SWENSON and MARY CLARE JALONICK
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.
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Senate Minority Leader Chuck Schumer, D-N.Y., turns to Sen. Brian
Schatz, D-Hawaii, while speaking with reporters as the government
lurches toward a shutdown if the Senate does not pass a House
measure that would extend federal funding for seven weeks, at the
Capitol in Washington, Tuesday, Sept. 30, 2025. (AP Photo/J. Scott
Applewhite)
 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
Republicans 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.”
They've also falsely claimed that Democrats forced the government
shutdown fight to give free health care to immigrants living in the
U.S. illegally. These immigrants are not eligible for insurance
bought on the ACA exchange or for Medicaid.
Republican leaders have offered to negotiate with Democrats on ACA
health insurance subsidies — after 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.
____
Swenson reported from New York.
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