The United States government reopened late Wednesday evening after a 43-day shutdown, but lawmakers failed to reach an agreement on a critical matter affecting the health insurance costs of approximately 22 million Americans.
At issue is the enhanced premium tax credit that helps offset the cost of Affordable Care Act insurance plans. This subsidy is scheduled to expire on December 31st, yet no legislative solution has been secured.
The Senate voted late Sunday on a funding package to end what had become the longest government shutdown in the nation’s history. Democrats had insisted that any agreement to reopen the government must include an extension of these health care subsidies. That demand went unmet in the final legislation.
The House of Representatives approved the Senate’s funding package on Wednesday, and President Trump signed it into law shortly thereafter. To obtain the necessary Democratic votes, Senate Republicans agreed to hold a separate vote on extending the tax credits by mid-December. However, passage of such legislation remains uncertain in the Senate, and House Republican leadership has not committed to bringing the matter to a vote in the lower chamber.
The timing presents a significant challenge for American families. Citizens are currently selecting their 2026 health insurance plans through the ACA’s online marketplaces, yet they face considerable uncertainty about what those plans will actually cost them come January.
Without congressional action, these enhanced premium tax credits will cease to exist at year’s end. The subsidies were first introduced in 2021 as part of the pandemic-era American Rescue Plan Act, then extended for an additional three years through the Inflation Reduction Act.
The financial impact on American households would be substantial. Low- and middle-income families that currently qualify for these tax credits would see their insurance premiums more than double, rising from an average of $888 in 2025 to $1,904 in 2026, according to analysis from the nonprofit health policy organization KFF.
The Congressional Budget Office has estimated that approximately 4 million Americans would drop their health coverage entirely if faced with these higher costs.
Under current law, the enhanced tax credit is available to individuals earning between 100% and 400% of the federal poverty level. For a single person, this sets the upper threshold at $62,000 annually. Some Americans earning above that benchmark may still qualify if their insurance premiums exceed 8.5% of their income.
Public opinion appears to favor extending these subsidies. Recent polling indicates that three-quarters of Americans support renewal, including 94% of Democrats and approximately half of Republicans.
The legislative calendar presents additional complications. If Congress does act to renew the subsidies, federal and state insurance marketplaces would need to recalculate and adjust the 2026 plans that are already available for purchase.
As Americans make critical decisions about their family’s health coverage for the coming year, they do so without knowing whether the financial assistance they have relied upon will continue to exist. The matter now rests with Congress, where the path forward remains unclear.
Related: Smithsonian Museums to Reopen Following Government Shutdown
