The federal government formally entered a shutdown Oct. 1, with a vicious debate over the extension of enhanced Affordable Care Act premium tax credits fueling the bi-partisan stand-off.
About 750,000 federal workers are expected to be furloughed during the government shutdown. Active duty members of the military must continue to work during the shutdown, without pay unless Congress signs the “Pay Our Military Act.”
Senate Democrats have three times blocked a two-week funding extension, saying they will not agree to a measure that does not include preservation of the enhanced ACA credits.
But even as Congress struggles to re-open government, more than 22 million Americans will receive notices of new ACA monthly premiums this month, which will be about double of what they pay now, said Anthony Wright, executive director of Families USA, in a Sept. 30 interview with American Community Media.
The enhanced premium tax credits — which Congress authorized at the start of the Covid-19 pandemic are offered to individuals whose health care premium exceeds 8.5% of their monthly income. They are set to expire Dec. 31, but notices of new premiums will go out this month as Open Enrollment begins Nov. 1.
Premium Spikes
“It’s the urgency of the moment,” said Wright. “Millions of Americans are about to face massive premium spikes in what they pay for health coverage,” he added, noting that millions will pay upwards of $1,000 for healthcare coverage.
“And so for those politicians who say maybe we put this off, their time is running out. People are going to fall off, be pushed or priced out of coverage because of these premium spikes, if nothing is done. A lot of people will be scared off.”
4 Million Will Lose Health Coverage
“Even if Congress fixes this issue at the end of the year or early next, a lot of people will be scared by the sticker shock. We won’t be able to get them back. And that’s not good for anybody,” said Wright. He noted that the “One Big Beautiful Bill,” which passed the House and Senate this summer, doled out millions to the wealthy, while refusing to extend enhanced ACA premium credits for the working class.
“That’s why we’re in this mess right now. There is now an urgency because it wasn’t dealt with in any of the previous pieces of legislation,” said Wright. Small business people and their employees, gig workers — who currently make up about 1/3 of the US economy — farmers, ranchers and others will all immediately feel the impact of doubled monthly premiums, he noted.
Several health advocacy groups have predicted that roughly 4 million Americans will lose health care coverage at the end of this year because they cannot afford higher premiums. Additionally, the “One Big Beautiful Bill” — recently rebranded the “Working Families Tax Cut Act” — has placed tighter constraints around Medicaid eligibility, and is expected to leave 12 million people without healthcare coverage.
White House Responds
In a memo released Oct. 1, the White House claimed that Democrats are holding the US government hostage as they seek to provide $193 billion in health care to undocumented residents. “Democrats and their Fake News allies want you to believe it’s all a lie that Democrats shut down the government over free healthcare for illegal aliens.”
“Except that’s exactly what happened,” read the memo. “As Vice President JD Vance said, “It’s not something that we made up. It’s not a talking point. It is in the text of the bill that they initially gave to us to reopen the government.”
The memo went on to read: “Democrats’ proposal would allow California to continue exploiting a loophole to fund Medicaid for illegal aliens.” Congressional Republicans have supported the false statement, saying they do not want to support healthcare funding for “illegal aliens.”
House Majority Leader Steve Scalise released a statement Oct. 1, which read in part: “The American people do not want to be held hostage to Chuck Schumer’s radical demands to fund illegal health care.” Appearing on “This Week With George Stephanopoulos” Sept. 28, Scalise said the enhanced tax credits were created during the Covid-19 pandemic, and there was no need to continue the program now that “Covid is over.”
California, along with several other states, does offer health care to its undocumented residents via Medi-Cal, the state’s version of Medicaid. The federal government currently pays 62% of California’s overall Medi-Cal budget — $107 billion — while the state chips in 22%.
However, California uses only state dollars to fund Medi-Cal for undocumented residents. Beginning next year, the state will freeze new enrollment, and in 2027, will implement a $30 monthly premium for undocumented residents who get their health care through Medi-Cal.
