At the center of the longest government shutdown in U.S. history has been a disagreement between Republicans and Democrats over health care subsidies.
Specifically, the funds allocated by the government to citizens who purchase health insurance under the Affordable Care Act (ACA), also known as Obamacare.
Affected by increases in health care costs
For 40 days, Democrats refused to support in the Senate a Republican-driven temporary measure to fund the federal government that did not include an extension of these subsidies, extended in 2021 and extended through 2025 by the Inflation Reduction Act supported by former President Joe Biden.
Finally, on Sunday, November 9, several Democratic senators broke with their party discipline and threw their support behind the measure in exchange, among other issues, for holding a vote in December on a one-year extension of these subsidies, which would otherwise expire at the end of 2025, that has little chance of success.
Coverage at risk
The 2021 expansion of Obamacare credits helped more middle-class Americans gain access to federal assistance. As a result, over the past four years, the number of people enrolled in the program doubled: from about 11 million to 24 million, according to data from the nonprofit KFF.
If the U.S. Congress fails to reach an agreement in December and the subsidy expansion is effectively ended, the people most affected will be seniors and middle and working class families.
People who rely on government money to qualify for a health plan would face fees that are double what they currently pay, according to KFF.
Ambitious healthcare reform
The ACA was one of the flagship policies of former President Barack Obama (2009-2017), who campaigned on a promise to cut health care costs and expand access to affordable, quality health insurance.
After a long battle in Congress, the legislation was signed into law by Obama in 2010, sealing with his name the completion of one of the most ambitious healthcare reforms in the country’s history.
Two years later, the Supreme Court upheld its constitutionality, allowing its key measures to go into effect, including Medicaid expansion, subsidies and a ban on discrimination based on pre-existing medical conditions.
From its inception until today, Republicans – with President Donald Trump at the helm – have opposed the legislation.
Millions at risk
According to KFF data, in 2024, Obamacare subsidies allowed insured individuals to save an average of $705, reducing their annual payment to $888.
Without these benefits, the average annual cost of insurance would have been $1,593, or more than 75% above current prices.
This increase in costs would force many people to go without health insurance.
Specifically, an estimated four million could lose their health coverage by 2034, according to the Congressional Budget Office.
There is no fully government-funded public healthcare system in the USA.
The Medicare and Medicaid programs, for families and low-income individuals and seniors, provide free or low-cost health care and operate differently from state to state.
Rising medical costs in rural areas
Texas and Florida, considered Republican strongholds, are the states that would face the largest increases in health insurance costs.
In these regions, increases can exceed 30%, especially in rural areas where competition among insurers is lower.
Residents in southern states where Medicaid was not expanded – such as Texas, North Carolina and Georgia – will also be among the hardest hit, because these places relied more heavily on subsidies and will now see costs rise significantly.
In rural regions of Wyoming, West Virginia and parts of Georgia, the increases would be even more dramatic.
Monthly payments for seniors can double, sometimes exceeding $2,000 per month in places with less access to medical services and few insurance options.
Filed under: Affected by increase in health costs
With information from EFE
