Why Health Insurance Credits Led to the Federal Government Shutdown

Lawmakers in the U.S. Congress hit a stalemate in talks to keep the government open and on Wednesday, a shutdown commenced. At the core of the disagreement between GOP lawmakers and their Democratic Party counterparts are the health care tax credits in the Affordable Care Act due to expire at the end of this year and which the Big Beautiful Bill’s provisions don’t include an extension to these tax credits. 

A lot has been said about the cuts to Medicare and Medicaid under that law, and the refusal to renew those ACA tax credits only piles to the hardship that approximately 22 million Americans will face in getting health cover come next year. 

Democrats in the Senate insist that those credits should be restored as a precondition to approving funding for the government, and the GOP says they are open to discussing that matter, but it shouldn’t be a precondition for keeping government open. Both sides have taken a hardline stance and the government shut down after a spending bill couldn’t get the needed 60 votes to pass in time. 

So, why are those tax credits so important that they have triggered this latest shutdown? The ACA was passed more than a decade back to help individuals who didn’t qualify for Medicaid due to earning above the poverty threshold to access health insurance cover. It also aimed to help those who were unable to get sufficient employer-sponsored health insurance to get the coverage they needed. 

KFF data shows that holders of health coverage obtained through ACA marketplaces nearly doubled after the passing of this Act. This shows how helpful the tax credits are, and continue to be, while they are still in effect. 

Currently, millions of U.S. households are grappling with the high cost of living, and data shows that approximately 4 million individuals could forego getting medical insurance once the tax credits are no longer available. For those who will still wish to retain their coverage, costs are bound to increase substantially, more than doubling in some cases. To put this in context, recent analysis shows that a family that spent $888 in total insurance premiums this year could see their costs hit $1,904 next year. That is a huge increase given the way families are currently struggling to meet their living expenses. 

Already, many people are reporting that the insurance companies from which they obtain coverage have notified them about upcoming increases to their premiums, and other insurers are getting ready to send similar notices. Premium increases so far have hit 50% in some cases. 

Partisan politics aside, this matter is very concerning and all stakeholders need to find a way to lessen the healthcare cost burden on Americans. Logic needs to prevail so that a workable and sustainable solution can be found. Medicare Advantage policy providers like Astiva Health now have an uphill task to continue offering the services they offer to vulnerable groups in these challenging circumstances. 

NOTE TO INVESTORS: The latest news and updates relating to Astiva Health are available in the company’s newsroom at https://ibn.fm/Astiva 

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