Shutdown ends, ACA tax credits not extended
TL/DR –
On November 12, President Trump signed a bill, ending the longest government shutdown in U.S. history and funding the government through January 30, 2026. Despite renewing key health programs and Medicare telehealth flexibilities, the bill did not extend ACA enhanced premium tax credits, risking affordable coverage for millions of Americans. Without extending the tax credits, it has been projected that premiums will increase 97% on average for nearly 1.7 million Californians, which might result in 400,000 of them losing their health coverage.
US Government Reopens but Leaves ACA Tax Credits in Limbo
The longest government shutdown in the history of the United States concluded after President Donald Trump signed a continuing resolution (CR), agreed upon by both the U.S. House and U.S. Senate, on November 12. This bill will fund the government until January 30, 2026, reopening federal agencies and extending government operations.
Notably, this CR renews a number of health programs on the brink of expiration, including Medicare’s telehealth flexibilities during the pandemic, and prevents further Medicare sequestration cuts. However, it fails to extend the enhanced premium tax credits provided by the Affordable Care Act (ACA), jeopardizing healthcare coverage for millions of Americans.
Future of ACA Tax Credits Uncertain
While the agreement signed by President Trump omits the extension of the ACA premium tax credits, Senate Majority Leader John Thune has promised to hold a vote on this matter in mid-December. On the other hand, House Speaker Mike Johnson has yet to commit to a floor vote before the tax credits expire on December 31. In response, House Democrats announced plans to use a discharge petition, a procedural strategy requiring 218 cosponsors, to force a vote on a three-year extension of the ACA tax credits. This measure would require the support of four Republican votes.
In California, the absence of an extension to these tax credits presents a significant threat. The ACA premium tax credits have allowed millions in the state to afford coverage in the ACA marketplace. Covered California, the state’s marketplace, predicts that nearly 1.7 million Californians will see their monthly premiums increase by an average of 97% if these tax credits are not extended, potentially pricing as many as 400,000 out of their healthcare coverage.
Effects on Health Programs and Medicare Relief
The CR ensures that government funding remains at current levels and restores several health programs that were under threat due to the shutdown, retroactive to October 1, 2025. It covers initiatives like the National Health Service Corps, Teaching Health Center Graduate Medical Education program, Community health centers, Hospital-at-Home initiative, and allocates $8 billion for Disproportionate Share Hospitals.
Furthermore, it reinstates Medicare’s telehealth flexibilities, applicable retroactively from October 1, 2025, ensuring patients dependent on virtual visits continue to receive care. For physicians, the bill suspends the statutory budget neutral “PAY-AS-YOU-GO” requirement, preventing an across-the-board 2% federal budget sequestration cut in 2026. If not for this waiver, physician payments could face an additional 2% sequestration reduction in 2026, adding to the financial pressure on medical practices.
What Lies Ahead?
While the resolution allows federal agencies to resume full operations from November 13 and safeguards crucial programs only through January, it leaves a long-term uncertainty for physicians and patients. If Congress fails to extend the ACA tax credits, millions of Americans could face premium hikes or lose coverage in 2026.
CMA President René Bravo, M.D., commented, “Ending the shutdown and restoring telehealth services is a necessary first step, but the real test will come next month. Congress cannot claim victory while millions of Americans stand to lose their health coverage. Extending the ACA premium tax credits isn’t optional—it’s essential to protecting access to care and preventing the destabilization of our health system.”
The CMA plans to continue advocating for physicians and patients, urging the federal government to ensure affordable ACA health care coverage as the decisive December vote approaches.
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