Government Shutdown Ends Without Extension of ACA Subsidies
TL/DR –
The longest U.S. government shutdown in history has ended, with President Trump signing a stopgap spending bill. However, the Democrats have been unable to secure a concrete plan to preserve enhanced tax credits for Affordable Care Act (ACA) plans that are set to expire at the end of 2025. If the subsidies do expire, premiums could skyrocket for millions of Americans, potentially resulting in an estimated 4 million people becoming uninsured.
End of Record-long Government Shutdown Doesn’t Secure ACA Subsidies
The US Government shutdown, the longest in history, came to an end with a stopgap spending bill approved by the House and signed by President Donald Trump. However, Democrats failed to secure a definitive path forward to maintain enhanced tax credits for ACA plans slated to expire in 2025.
The Senate Republicans have agreed to consider the subsidies before their expiration, but this isn’t a guarantee that the assistance will persist. This leaves little time for regulators, insurance companies, and consumers to adjust to potential changes and decide whether to elect into an ACA plan for 2026.
The historic 43-day shutdown impacted hundreds of thousands of federal workers, disrupted air travel and nonessential government functions, and made it difficult for families to access food assistance.
The new deal extends appropriations until January’s end, provides funding to various agencies, and halts shutdown-related federal worker layoffs. It also ensures back pay for those affected, extends Medicare payment for telehealth, and waives budget rules that would have resulted in substantial Medicare cuts.
Eight Democrat Senators supported the deal, which received a 60-40 vote in the Senate, and later a 222-209 vote in the House. Democrats who backed the government reopening were criticized by their colleagues, who accused them of yielding to Trump.
Senate Republicans plan to decide on the issue by mid-December, possibly curbing subsidies to appeal to conservatives. Despite this, House Democrats filed a separate discharge petition for a three-year extension of subsidies. However, this motion requires Republican support to succeed.
If subsidies lapse, an estimated 4 million people would become uninsured, and premiums would surge for millions on the exchanges. The subsidies’ extension is popular among voters, including Republicans.
President Trump proposed to reassign federal aid to directly help consumers purchase medical services. However, this could primarily benefit healthier, wealthier Americans rather than improving marketplace affordability.
Many Republicans express concern over the cost of extending enhanced ACA subsidies, which would be approximately $335 billion over the next decade. Health insurance groups argue against claims of widespread enrollment fraud and insurer profiteering, stating that rising costs are due to increasing medical costs.
Industry groups urge Congress to act promptly to maintain subsidies. The removal of subsidies could increase the U.S. uninsured rate and significantly impact the healthcare industry, with U.S. providers facing an estimated $32 billion revenue loss next year.
—
Read More Health & Wellness News ; US News