The United States’ longest government shutdown appears set to conclude, as eight Democrats are ready to align with Republicans on an agreement that relinquishes their party’s primary healthcare coverage requirement.
The core of the disagreement has been the Republican Party’s unwillingness to agree to the Democratic Party’s request for prolonging federal subsidies for individuals purchasing healthcare through the Affordable Care Act (ACA) exchange.
These tax credits were introduced during the pandemic, subsequently prolonged by Congress via the Inflation Reduction Act (IRA) in 2022, and are scheduled to lapse by year-end.
Democrats had declined to approve President Donald Trump’s spending legislation without an extension of these credits, while Republicans remained firm, disseminating accusations, even as they and their party faced blame for the shutdown.
This past Sunday, the eight Democrats conceded on that particular requirement, for the time being. To secure the votes necessary to terminate the shutdown, Senate Majority Leader John Thune, a Republican representing South Dakota, pledged a mid-December vote on a Democratic-preferred extension bill for ACA subsidies.
This agreement merely postpones the conflict instead of resolving it. Democrat Tim Kaine, among the eight, justified his decision to vote for ending the shutdown by stating the arrangement “ensures a vote to prolong Affordable Care Act premium tax credits, something Republicans had been reluctant to do,” and he conveyed certainty that the vote would ultimately lead to the continuation of those subsidies.
Healthcare costs could triple for millions of people
These subsidies have been crucial for individuals obtaining healthcare via Obamacare. In 2025, millions obtained insurance through the ACA marketplace, and reports indicate that 93% of those enrolled benefited from tax credits that lowered their expenses.
However, should Obamacare subsidies lapse, projections from the marketplace suggest that premiums could double, or even triple, for the 22 million Americans currently benefiting from enhanced subsidies that reduce healthcare costs. The health policy research group KFF notes that a significant number of marketplace enrollees reside in Republican congressional districts.
Older adults and senior citizens face a heightened risk of losing healthcare access, given that these subsidies contributed to a 50% decrease in the uninsured rate for Americans aged 50 to 64.
The Congressional Budget Office (CBO) also projects that, should ACA provisions expire, approximately a significant number of additional individuals would become uninsured compared to current trends.
Such an increase in the uninsured population could lead to multiple repercussions, such as elevated Medicare expenses and increased pressure on hospitals across the nation.
A prominent nonprofit organization states that with a rise in uninsured individuals, “the loss of coverage would translate to greater Medicare expenditures, as more people would enroll in the program with poorer health and requiring more costly treatments.”
Furthermore, as the risk pool deteriorates, hospitals along with state and local governments might ultimately shoulder the primary burden of these ACA modifications.
An expert commented, “The loss of insurance has a ripple effect that ultimately impacts local governments and healthcare providers within the community.”
Insurers throughout the market, extending beyond just those dependent on ACA subsidies, are preparing for the repercussions of the expiration, anticipating market instability. This could result in increasing premiums for all individuals on the ACA marketplace, irrespective of their subsidy reliance, and also for those with off-exchange plans, which typically align their rates with ACA-compliant offerings.
Moreover, as a portion of the population became more reliant on employer-sponsored insurance because of escalating premiums in the ACA marketplace, employers confronting increased enrollment and expenses might transfer some of that financial strain onto their employees.
A recent study revealed that average total health benefit costs per employee are projected to increase by 6.5% in 2026, marking the most significant rate hike in more than 15 years. A survey of over 1,700 U.S. employers indicated that 59% intend to implement cost-reduction adjustments to their plans in 2026.
