Government Shutdown: What It Means for Your Health Insurance and Why Keeping Old COVID-Era Rules Could Hurt

By Samantha Weigand

A government shutdown occurs when Congress fails to agree on funding for federal services, halting many non-critical activities. This also jeopardizes "premium tax credits," the financial aid that helps millions afford health insurance through the Affordable Care Act (ACA). A funding lapse can disrupt offices managing ACA plans, potentially leading to lost financial assistance and significantly higher health insurance costs for consumers.

This article explores the causes of shutdowns, how ACA subsidies changed during COVID, arguments against continuing these enhanced benefits, the consequences if this extra help ends, the political dynamics driving shutdown risks, consumer actions, and the future implications for U.S. healthcare. Understanding these factors is crucial for comprehending potential coverage losses, price increases, and shifts in healthcare funding.

What Is a Government Shutdown and How Does It Affect HealthInsurance Help (ACA Subsidies)?

Government shutdowns, caused by budget disagreements, halt many non-essential federal operations. While mandated programs like ACA subsidies, Medicare, and Medicaid typically retain funding, the agencies administering them may face staffing and operational cuts. This can slow enrollment, delay financial aid distribution, and impair outreach. System and customer service issues can escalate, potentially causing people to lose coverage, especially during open enrollment periods.

Why Does the Government Shut Down?

A federal government shutdown begins if Congress fails to pass new spending laws or temporary funding plans (continuing resolutions) by September 30th, and the President doesn't sign them. Key reasons include:

• Political parties disagree on spending levels and specific policy riders.

• Disputes over budget balancing.

• Debates on passing omnibus bills versus multiple smaller appropriations.

These funding impasses abruptly halt regular government functions, shifting focus to essential services. Such political disagreements can delay ACA subsidy management, as discussed next.

How Do Shutdowns Affect Health Insurance Programs Like ACA, Medicare, and Medicaid?

Even brief shutdowns don't cut funding for legally mandated federal health programs like Medicare, Medicaid, and ACA subsidies. However, without staff at agencies like CMS (Medicare/Medicaid) and the IRS (taxes, ACA verification), critical administrative tasks can cease. This can lead to delays in processing applications, claims, and providing state support.

Here's a breakdown of how key programs are affected:

• ACAHealth Plans (Marketplace): During a shutdown, you might experience enrollment delays and potential customer service closures. Financial help for these plans is required by law.

• Medicare Claims: Expect delays in processing medical bills. Medicare benefits are also required by law.

• Medicaid Operations: States may see reduced federal support for their Medicaid programs, which are funded jointly by states and the federal government.

Thus, even with funds available, operational slowdowns can prevent individuals from selecting plans or receiving timely financial aid, leaving them without expected assistance and uncertain about their health coverage, particularly during enrollment.

What Have Past Government Shutdowns Done to Healthcare?

Past shutdowns, such as in 2013 and 2018–2019, illustrate widespread healthcare management disruptions:

• 2013 Shutdown – CMS delayed sending health plan enrollment notices, confusing uninsured or newly eligible individuals.

• 2018–2019 Shutdown – IRS system failures delayed income verification for health insurance aid, leading to extensive manual processing and slower assistance.

• Problems for State Health Plans – State-run marketplaces, lacking sufficient technology and staff, have reduced outreach efforts.

These events show that even mandated programs face significant operational challenges, eroding confidence in health insurance assistance. This also increases the risk that enhanced COVID-era benefits may end due to legislative stalemates.

How Does ACAHealthInsurance Help Work, and What Changed During COVID-19?

ACA "premium tax credits" are subsidies that reduce monthly health insurance premiums, based on income and the cost of a benchmark plan. They make insurance affordable for those earning 100% to 400% of the federal poverty level (FPL). During the COVID-19 crisis, Congress passed two major laws that temporarily expanded these subsidies to protect Americans from pandemic-related financial hardship.

What Are ACAHealthInsurance Discounts (Premium Tax Credits) and Who Can Get Them?

These discounts cover the difference between a benchmark plan's cost and a small percentage of household income (8.5% to 9.83%), lowering monthly premiums. Eligibility requires:

• Enrollment through the Health Insurance Marketplace.

• Income between 100% and 400% FPL (temporarily raised to 600% FPL during COVID).

• No access to affordable employer-sponsored or Medicaid coverage.

This system links premium costs to income, removing financial barriers to essential health benefits.

How Did the American Rescue Plan Act of 2021 Make ACA Health Insurance Help Better?

The American Rescue Plan Act of 2021 (ARPA) temporarily eliminated the 400% FPL income cap, reduced premium contributions for middle-income individuals, and offered free basic (Bronze) plans to households at or below 150% FPL.

The American Rescue Plan Act of 2021 introduced several key changes to health insurance help:

• No income limit for help: This change, made by the American Rescue Plan Act (2021), lasted until the end of 2022 and cost an estimated ~$200 billion over 2 years.

• Free basic (Bronze) plans for those earning 150% FPL or less: Also enacted by the American Rescue Plan Act (2021), this lasted until the end of 2022 and helped 6 million people.

• More financial help for those earning 100–150% FPL: This enhancement, from the American Rescue Plan Act (2021), was in effect until the end of 2022.

By expanding eligibility and lowering out-of-pocket costs, ARPA significantly boosted enrollment and affordability, setting a new benchmark for subsidy levels.

How Did the Inflation Reduction Act of 2022 Help Keep These Discounts Going?

The Inflation Reduction Act of 2022 (IRA) extended the enhanced ACA subsidies until the end of 2025, maintaining the higher income limit (up to 600% FPL). This law allocated approximately $110 billion over three years to sustain pandemic-era affordability. By guaranteeing this extended aid, the IRA provided a buffer for lawmakers to devise a long-term solution without abruptly cutting financial assistance amidst other challenges.

How Did the Extra Health Insurance Help Change Who Signed Up and How Affordable It Was?

The enhanced subsidies more than doubled marketplace enrollment, from about 12 million in 2021 to 24.2 million in 2025. Concurrently, the average monthly out-of-pocket premium cost dropped by 44%.

• Uninsured rates reached a record low of approximately 8%.

• Enrollment increased among middle-income individuals and those in rural areas.

• Households earning 200–400% FPL saw premium contributions decrease by 30–50%.

These outcomes demonstrate the effectiveness of targeted financial aid in expanding coverage and reducing consumer costs, sparking debate over the permanence and expense of these benefits.

The American Rescue Plan Act of 2021 and the Inflation Reduction Act of 2022 significantly enhanced ACA financial aid, leading to a surge in health plan enrollment. These laws temporarily removed income limits and lowered premium contributions, resulting in record low uninsured rates and a 44% drop in average monthly out-of-pocket costs.

This information clearly illustrates how ACAhealthinsurance assistance evolved during the COVID-19 pandemic and its positive impact on enrollment and affordability.

Why Do Some People Not Want to Keep the Extra COVID-Era Health Insurance Help?

Opponents of continuing the enhanced subsidies cite concerns about cost, legislative intent, program integrity, and market distortion. They argue that making these temporary benefits permanent contradicts their original pandemic-response purpose and imposes hundreds of billions in taxpayer costs.

Why Do People Who Worry About Government Spending Say the Extra Health Insurance Help Costs Too Much?

Critics estimate that making the enhanced subsidies permanent would cost approximately $350 billion over ten years. They contend that such substantial taxpayer spending exacerbates the national debt, arguing:

• Government funds should prioritize direct pandemic recovery, not perpetual health insurance aid.

• The high cost contributes to the national debt.

• More fiscally responsible alternatives exist, such as income-based aid within existing budget constraints.

Opponents of continuing enhanced ACA subsidies primarily worry about the cost, estimating it at $350 billion over ten years if made permanent. Concerns also exist regarding program integrity, with some studies suggesting millions may have received improper payments, costing billions.

This supports the article's points on why some oppose continuing COVID-era ACA rules, specifically regarding cost and concerns about fraud or waste.

Why Do People Say the COVID Help Was Only Meant to Be Temporary?

Those against permanent extension emphasize that ARPA and pandemic declarations were explicitly temporary responses to a unique crisis. They argue:

• Emergency aid should conclude with the emergency, reverting to pre-pandemic norms.

• Perpetuating temporary aid blurs the line between short-term relief and long-term policy.

• Legislative overreach in extending emergency provisions sets a problematic precedent.

By focusing on original legislative intent, they advocate for returning to baseline ACA subsidies and discontinuing special programs.

Is There Proof of Cheating or Waste in the COVID-Era Health Insurance Help?

Claims of "phantom" enrollees—individuals receiving subsidies without utilizing medical services—raise concerns about improper payments. Investigations have identified:

• Duplicate applications across different state marketplaces.

• Inadequate income verification leading to overpayments.

• Administrative errors resulting in uncorrected discrepancies during tax reconciliation.

While the error rate is small relative to total spending, these instances fuel calls for stricter oversight rather than unlimited program continuation.

How Do People Against the Extra Help Say It Harms the Health Insurance Market?

Critics argue that excessive subsidies reduce "skin in the game," leading to:

• Higher plan prices as insurers pass costs to taxpayers.

• Reduced consumer price sensitivity.

• Market saturation is stifling private sector innovation.

They believe that scaling back subsidies would foster a more efficient market, encouraging competition based on plan quality rather than taxpayer funding.

What Bad Things Could Happen If the Extra ACA Health Insurance Help Ends?

If the enhanced COVID-era subsidies expire, it would reverse progress in expanding coverage, drastically increase costs, strain healthcare providers, and create significant financial hardship for families and communities.

How Many Americans Might Lose Health Insurance If the Extra Help Ends?

The Congressional Budget Office (CBO) estimates that approximately 4 million Americans could lose health insurance within ten years if enhanced subsidies cease. Most affected would be those earning 200% to 400% FPL, for whom actual premium costs would surge to over 10% of their income, making coverage unaffordable. This significant rise in uninsured individuals would resemble pre-ACA levels, hindering access to preventive care and chronic disease management.

How Much More Would ACA Health Plans Cost Without the Extra Help?

The Kaiser Family Foundation projects an average 75% increase in out-of-pocket premium costs. Middle-class individuals could see monthly bills rise by $300–$400.

• Households earning 200–300% FPL would face an 85% increase.

• Households earning 300–400% FPL would face a 95% increase.

Such steep increases would compel many families to opt for cheaper, less comprehensive plans, experience coverage gaps, or become uninsured, undermining the ACA's goal of affordability.

What Happens to People's Health If They Lose This Help?

Losing health insurance leads to delayed doctor visits, reduced preventive care, and poorer management of chronic conditions. This can result in:

• Increased rates of uncontrolled hypertension and diabetes.

• More emergency room visits for preventable conditions.

• A higher mortality risk, with studies indicating a 40% increased risk of death for the uninsured.

These health declines exacerbate financial woes through mounting medical debt and reduced work capacity.

How Would Doctors and Hospitals Be Affected If the Extra Help Ends?

Hospitals and clinics anticipate losing $32 billion in patient payments and facing a $7.7 billion increase in "uncompensated care" next year. Rural providers and those serving low-income communities would be hit hardest, potentially leading to service closures in underserved areas and worsening health disparities.

If enhanced ACA subsidies end, an estimated 4 million Americans could lose healthinsurance, and average monthly premiums could rise by up to 75%. This would also result in doctors and hospitals losing approximately $32.1 billion in payments and providing an additional $7.7 billion in uncompensated care.

This information directly confirms the article's projections on the negative consequences of ending enhanced ACA subsidies, including coverage loss, premium increases, and financial impacts on providers.

Which Groups of People Would Be Hurt the Most?

If the extra help ends, certain groups would suffer disproportionately:

• Middle-income families (200%–400% FPL) would experience the largest premium increases.

• Rural residents, already facing limited plan choices, would lose their few affordable options.

• Older adults under 65 with chronic conditions heavily rely on affordable marketplace plans.

• Small business employees without employer-sponsored coverage would face significantly higher out-of-pocket costs.

What Are the Bigger Money Problems If the Extra Help Ends?

Ending subsidies would reduce household discretionary income by billions, curbing consumer spending and harming local economies. Employers might also face higher uncompensated care costs as their workforce loses insurance, potentially impacting wages and benefits. Collectively, these economic strains could impede growth and reduce tax revenues.

How Do Political Fights Over ACA Health Insurance Help Increase the Risk of a Government Shutdown?

The debate over continuing enhanced health insurance subsidies has become a significant bargaining chip in annual appropriations negotiations, directly linking health policy to funding bills and heightening government shutdown risks as deadlines approach.

What Do Lawmakers in Congress Think About Keeping the Extra ACA Health Insurance Help?

Democrats advocate for making the enhanced subsidies permanent, framing affordability as a bipartisan goal, and seeking to use budget reconciliation. Republicans largely oppose permanence, citing cost concerns and favoring a return to pre-COVID subsidy levels or targeted aid within strict budget limits.

This partisan divide places ACA subsidies at the center of budget impasses and shutdown threats.

How Could a Government Shutdown Affect Money for Healthcare and Services?

A shutdown impedes the Department of Health and Human Services (HHS) and related agencies from processing provider payments, managing discretionary programs, and preparing for emergencies. A prolonged shutdown could halt new Medicaid rule implementations, delay quality improvement funding, and slow public health responses, creating broader healthcare disruptions beyond subsidy administration.

What Solutions or Compromises Are Lawmakers Suggesting?

Lawmakers are exploring:

• Short-term funding extensions to decouple subsidy decisions from main appropriations.

• Targeted extensions for specific populations via reconciliation, offset by savings (e.g., drug pricing reforms).

• Reforming subsidy calculations and enhancing income verification to reduce costs.

These varied proposals aim to balance fiscal prudence with coverage continuity amidst ongoing broader healthcare reform discussions.

How Do What People Think and Upcoming Elections Affect This Debate?

Polls show 70% public support for extending enhanced subsidies until 2025, pressuring lawmakers in swing districts. With upcoming congressional and presidential elections, both parties are keenly observing voter reactions to potential coverage losses, viewing ACA subsidies as a pivotal issue in key states.

What Should You Know If the Extra COVID-Era ACA Health Insurance Help Might End?

Individuals and families must prepare for potentially higher monthly premiums by exploring alternative coverage options and adjusting budgets to prevent coverage gaps if enhanced subsidies expire.

How Can You Get Ready for Possible Higher Health Insurance Bills?

Begin by:

• Reviewing current plan costs and deductibles.

• Comparing projected 2026 plan costs with potential state Medicaid eligibility.

• Adjusting household budgets to accommodate potential premium increases of up to 75%.

• Investigating Health Savings Accounts (HSAs) for tax-advantaged medical savings.

Proactive planning mitigates the shock of sudden cost increases and helps ensure continuous coverage.

What Can You Do If You Might Lose Your Health Insurance?

If facing potential loss of subsidy, consider:

• Checking Medicaid eligibility if your income falls below the state thresholds.

• Exploring short-term health plans for temporary coverage (note their limited benefits).

• Investigating off-marketplace plans, which might be cheaper without subsidies.

• Checking employer-sponsored coverage or group plans through associations.

Thoroughly understand the trade-offs in benefits and provider networks when considering off-marketplace options.

How Can Small Business Owners and People Who Are More at Risk Deal with These Changes?

Small business owners can:

• Explore the SHOP Marketplace for potential small business tax credits.

• Join "association health plans" to pool risk and potentially lower costs.

• Offer Health Reimbursement Arrangements (HRAs) to help employees pay for individual plans.

At-risk populations—such as rural residents, older adults under 65, and individuals with disabilities—should seek assistance from local "navigators" and community health centers for personalized enrollment support and cost management advice.

What Does This Mean for How Affordable US Healthcare Will Be in the Future?

The debate over ACA subsidies raises broader questions about long-term healthcare financing, market structure, and equitable access. These issues will shape healthcare policy beyond 2025.

How Would Making the Extra Help Permanent Affect Government Spending?

Permanently extending current enhanced subsidies would add approximately $350 billion to federal spending over ten years, increasing the national debt without offsetting revenue. Supporters, however, cite balancing benefits like reduced uncompensated care, increased preventive care, and economic gains from a healthier, more productive, and tax-contributing populace.

What Other Healthcare Changes Are Being Talked About?

Long-term proposals include:

• Establishing a "public option" government-run plan to compete with private insurers and negotiate lower prices.

• Implementing out-of-pocket spending caps and income-indexed cost-sharing.

• Expanding Medicaid in non-expansion states and stabilizing insurance markets through reinsurance programs.

How Can We Pay for Healthcare in a Fair Way That Lasts?

Achieving sustainable healthcare affordability requires:

• Linking subsidy funding to dedicated revenue streams (e.g., wealth taxes, drug price savings).

• Enhancing marketplace competition through risk adjustment and public plan options.

• Promoting preventive care to reduce future high-cost interventions.

• Ensuring accurate income verification to prevent improper payments.

Allowing enhanced subsidies to expire, especially amid shutdown threats, would undo significant progress in coverage and affordability, leading to severe health and financial consequences. Voters and lawmakers must weigh short-term fiscal savings against long-term societal benefits, choosing a path that ensures both fiscal responsibility and reliable healthcare access. Navigating this complex landscape demands consumer preparedness, creative legislative compromises, and a commitment to sustainable solutions that protect health coverage without exacerbating national debt.