Congress faces a government shutdown deadline at midnight on September 30. As negotiations intensify, Democrats have introduced a stopgap spending bill that would add $1.5 trillion to the national debt over the next decade, primarily through permanent extensions of Obamacare subsidies and reversals of healthcare savings measures.
The Democrat proposal ties government funding to maintaining enhanced Affordable Care Act (ACA) subsidies that were initially enacted under the Biden-era American Rescue Plan and later extended by the Inflation Reduction Act. These expanded subsidies are set to expire unless Congress acts. Rather than separate healthcare negotiations, Democrats are pushing to include the subsidy extensions directly within the stopgap funding bill.
Republicans oppose tying ACA subsidies to the continuing resolution. They favor handling the healthcare provisions independently to prevent increased spending from being forced into a short-term funding deal. According to the Committee for a Responsible Federal Budget, the Democratic plan would eliminate health savings passed in previous legislation and significantly increase borrowing, contributing $1.5 trillion to the national debt over ten years.
Maya MacGuineas, president of the CRFB, emphasized that any extension of ACA subsidies should be responsibly offset. She urged Congress to avoid new borrowing and instead look for savings in areas such as Medicare reform, Medicaid efficiency, and broader spending reductions.
Critics also point to enrollment inefficiencies under the expanded ACA subsidies. Analysis reveals that a significant portion of new enrollees under the COVID-era subsidy enhancements either never used their health plans or were unknowingly signed up. In 2024 alone, taxpayers reportedly paid $35 billion for individuals who paid no premiums and made no insurance claims, revealing issues of phantom enrollment and double coverage.
If Democrats succeed, the extended subsidies could cost over $40 billion annually. Republicans argue this would increase long-term taxpayer liability without addressing the underlying flaws in the system. The debate underscores deep divisions over healthcare, federal spending, and the use of temporary funding bills to implement lasting policy changes.
