The U.S. government shut down at midnight on Tuesday evening, the first such crisis since early 2019. At stake in this congressional standoff is the health care of millions of people who rely on the expanded Affordable Care Act premium tax credits which are set to expire at the end of this year.
Tell Congress: End the government shutdown and protect our health care!
Here’s what you need to know.
What’s happening now
A government shutdown occurs when Congress fails to pass the budget bills that keep government agencies funded and working properly. Until Congress reaches an agreement, many government programs send employees home without pay (a “furlough”), leaving many important services unattended. While most workers are generally paid retroactively once the government reopens, this pause in paychecks creates real economic hardships for many families.
Some government programs are exempt from government shutdowns and will continue to operate. That includes Social Security benefits, Medicare, the Post Office, the military, law enforcement, and air traffic control. But for most of the government, work stops entirely.
The list of federal programs affected by the shutdown is long: education, infrastructure, agriculture, small businesses, national parks, and many more. This shutdown in particular threatens to cause even more harm than usual: the WIC nutritional program for mothers and young children is expected to run out of money quickly. The Trump administration has also threatened to use the shutdown to permanently eliminate jobs for many vital government programs.
The longer these shutdowns continue, the more damage they cause. Between the disruptions to government programs and the pause in federal salaries, government shutdowns cause the entire economy to slow. The 2018-2019 government shutdown lasted a record 35 days, which cost the economy about $86 million per day.
To end the shutdown, Congress does not even need to fully finish its budget process. It could simply pass a continuing resolution—a temporary bill to extend the deadline and give them additional time to negotiate. But first, Congress has to agree on whether to address another looming deadline: affordable health care.
Millions could lose health care
The current shutdown was triggered by a dispute in Congress over health care. The Affordable Care Act (ACA)’s premium tax credit helps low-income households afford health insurance plans on the ACA marketplace. This tax credit was expanded in 2021, and the expansion was later extended through 2025. It has been successful in vastly expanding healthcare access.
Without action, this expanded tax credit will expire at the end of this year. The consequences would be devastating:
- 3.8 million people would lose health insurance.
- People with the tax credit would see premiums increase by an average of 44%.
- Some of the poorest people in the country could see increases of over 500%.
Even those in the ACA marketplace who do not receive the expanded premium tax credit may see their insurance premiums rise, as insurers will likely raise everyone’s premiums to make up for the large number of people forced to drop their insurance policies. Some analysts suggest that this could cause something in the range of a 4% spike in premiums for the 24 million people who get their insurance through the ACA marketplace.
The path forward
Congressional Democrats have offered a continuing resolution that both keeps the government open and makes the expanded tax credit permanent. Republicans, on the other hand, want to handle the upcoming tax credit expiration separately from the shutdown, crafting a proposal that would attach an extension to other conservative policies.
Thankfully, there is hope for a way forward. Many Congressional Republicans agree with Democrats that the expanded healthcare tax credit should be extended through at least next year. A bipartisan House proposal has attracted 13 Republican and 10 Democratic cosponsors, proving that there is some common ground on the need for an extension.
The best solution is simple: Congress should pass a bill that both ends the government shutdown and permanently extends the expanded premium tax credit. This would address two deadlines at once, preserving the health care of millions of people in the U.S. while also restoring government services until Congress can figure out how to handle this year’s budget.
Tell Congress: End the government shutdown and protect our health care!
