Government Shutdown & Health Care

With no end in sight for the federal government shutdown, Democrats continue to push for the extension of the expiring tax credits for the Affordable Care Act (ACA) health care premiums. This week, beneficiaries are also beginning to receive letters for their insurance companies with information regarding premium increases.

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By: Tony Roda, Williams & Jensen

Highly criticized for choosing to not fight a Republican-sponsored, long-term Continuing Resolution in March 2025,¹ Senate Majority Leader Chuck Schumer (D-NY) and his Democratic colleagues made clear in September 2025 that their support for a new Continuing Resolution² would be conditioned on four specific proposals:

• Extension of the expiring tax credits for Affordable Care Act (ACA) health care premiums;
• Reversal of cuts to Medicaid, which were enacted as part of the reconciliation bill (aka, the One Big Beautiful Bill);
• Revocation of the Trump Administration's freeze on certain federal spending, including foreign aid and grants to states; and
• Assurance that President Trump will not claw back additional appropriated funds.

Soon realizing that their message was too complicated to be easily understood, the Senate and House Democratic Leadership narrowed the field to one request – extension of the expiring tax credits for the Affordable Care Act (ACA) health care premiums. The message now is simple and understandable, and Democrats have shown a high degree of discipline in conveying it and not being distracted by other issues.

Senate Appropriations Committee Ranking Member Patty Murray (D-WA) summed it up a few days ago:

Democrats also point out that more than 3 in 4 people who get their health care through the ACA marketplaces—18.7 million of 24.3 million—live in states President Trump won in 2024.

These facts have not been lost on the Republicans. Senate Majority Leader John Thune (R-SD) said recently, "There is a path forward, I believe, but it has to include reforms, and can I guarantee an outcome? No. And that's what people [Democrats] want to see -- guarantee us that this is going to pass. I can't guarantee it's going to pass. I can guarantee you that there will be a process and you will get a vote." 

Congressional Democrats believe that the issue of health care, as it has at times in the past, could propel them to electoral success in next year's mid-term elections. The ACA premium issue is the tip of the spear of the argument, but pending increases in Medicare Part B premiums of 11.6 percent expected next year and restrictions to Medicaid eligibility made in the One Big Beautiful Bill bolster their argument that Republicans are putting people at risk by constricting access to health care.

For their part, Republicans want reforms to the ACA premium credits to be included in any extension. The “enhanced” aspects of the credit were enacted into law during the pandemic and then extended through calendar year 2025 as part of the Inflation Reduction Act of 2022.

There are two key components to the enhanced credit:

• The original ACA tax credits were available only to households with incomes between 100 percent and 400 percent of the federal poverty level (FPL). In 2025, 400 percent of the FPL is $62,600 for a single individual and $128,600 for a family of four. The enhanced credits do not have the 400 percent FPL cap.
• The second enhancement lowered the maximum percentage of household income that individuals and families pay toward the cost of a benchmark ACA silver plan. For 2025, this cap is set at 8.5 percent of household income for all eligible income levels.

Republicans are quick to seize on some eye-popping examples of what the enhancements mean in real life and use the examples to push for reforms. In a recent press release, House Ways and Means Committee Chairman Jason Smith (R-MO) stated, “With no income cap, expanded PTCs [premium tax credits] benefit wealthy enrollees in high-cost areas. 

• A family of four in Prescott, AZ, making $600,000 annually qualifies. 
• A married couple in West Virginia making $580,000 annually qualifies. 
• A single individual in Vermont making $180,000 annually qualifies.

Republicans also have said they are open to discussions on extending the premium credits but only after the government is re-opened, meaning that Republicans want the Democrats to supply the necessary votes for passage of a new Continuing Resolution. As of this writing, the federal government shutdown is in week five, with no end in sight. However, there are some near-term dates that may move one party or the other, or both, to seek a resolution.

First, on November 1, the ACA's open enrollment period began. Beneficiaries should receive letters from their current insurance company providing information on changes to their current plan and new premium information. Democrats are counting on this national wave of premium increase announcements to spur Republicans to seek a deal on the expiring credits.

Second, on November 4, elections are being held in Virginia and New Jersey for statewide offices. These off-year elections often are viewed as a barometer of the popularity of the current party in power. The results of these elections may well move one of the parties to soften their current position and seek a resolution.

Please know that NCPERS will keep its members informed on significant developments on these issues as events warrant.

Tony Roda is a principal at the Washington, D.C. law and lobbying firm Williams & Jensen, where he specializes in legislative, regulatory, and fiduciary matters affecting state and local retirement plans. He represents the National Conference on Public Employee Retirement Systems and state, county, and municipal retirement plans in California, Colorado, Georgia, Kentucky, Nebraska, Ohio, Tennessee, and Texas. Tony has an undergraduate degree in government and politics from the University of Maryland, J.D. from the Catholic University of America, and LL.M (tax law) from the Georgetown University Law Center.