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

"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"

"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."

A government shutdown occurred while lawmakers disagreed over linking federal funding to health care provisions. Key contention centers on expanded Affordable Care Act premium tax credits set to expire at year-end, which reduced premiums for low- and middle-income enrollees since the COVID-19 pandemic. Analyses indicate the credits' expiration would more than double subsidized enrollees' premiums next year. Democrats demand extending the subsidies and reversing Medicaid cuts from a recent mega-bill; some states are already reducing Medicaid payments. Some Republicans express openness to extending credits but prefer funding the government first and negotiating health changes afterward.

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