Introduction to the Issue
Funding talks, coupled with concerns about access to health care, are becoming a bit of a repetitive theme in Washington, D.C. This time, it’s an Affordable Care Act era health insurance tax credit set to expire at the end of the year that is crescendoing into an increasingly loud focal point amid the ongoing budget conversations to avoid a looming government shutdown.
The Premium Tax Credit Explained
The premium tax credit is meant to offset premium costs for health insurance purchased through the Affordable Care Act’s marketplace. The subsidies were increased and extended during the Biden administration, but are set to expire at the end of this year. Whether to extend them — and for how long — is dividing lawmakers, including in Southern California.
Lawmakers’ Stances
In one corner, there is a group of conservatives who have promised to block any funding deal that extends the subsidies, NOTUS reported. Rep. Eric Burlison, a Missouri Republican, has said the country cannot afford to continue the enhanced subsidies. Then there are Democrats, who are steadfast that the subsidies should be extended — preferably permanently — and said they are committed to ensuring congressional Republicans do not make more cuts to hospitals or access to health care, especially as health care costs continue to rise.
Bipartisan Efforts
And increasing the pressure on GOP leadership even further is a bipartisan group of lawmakers — which includes nearly a dozen Republicans who are considered to be fairly vulnerable in the upcoming 2026 midterm elections — who are backing a plan to extend the subsidies for just one year. The tax credits should end, said Rep. Jen Kiggans, a Virginia Republican who is leading this effort, but in a “reasonable approach.” That short-term extension, continuing the subsidies through the midterm elections, is backed by California Reps. Young Kim, R-Anaheim Hills, and David Valadao, R-Bakersfield.
Local Representatives’ Views
“Many in our community rely on health care premiums to care for their loved ones and keep insurance affordable,” Kim said in a statement. The bill, she said, “is critical to ensuring that working-class Californians and the most vulnerable in our community can access essential health care coverage as Congress works toward a responsible, long-term solution.” But just one year isn’t enough, though, for Rep. Mike Levin, a Democratic member of the Appropriations Committee.
Impact on Healthcare
The premium tax credits, he said, are “a piece of a much larger series of actions that will break the health care system in this country,” pointing to the spending bill that included major changes to tax policy and programs, such as Medicaid, recently signed into law by President Donald Trump. The bill cut Medicaid and food stamps by about $1.2 trillion. More than 2.3 million Californians could lose access to Medi-Cal coverage, projections estimated.
A recent analysis by KFF, a nonpartisan health policy organization, found that the median proposed increase in 2026 for insurance plans purchased through Obamacare’s marketplace is 18% — and the expiration of the premium tax credits is considered “a significant factor in their rate hikes for next year.” Other factors include rising health care costs, inflation and growing demand for GLP-1 drugs, the study found.
Potential Consequences
“You have to look at it as part of a broader package that really is going to do significant harm to health care in our country,” said Levin, D-San Juan Capistrano. “I will not support a bill that rips away health care from the American people.” According to Levin’s office, some 600,000 Californians who get their insurance through Covered California could lose their insurance if the subsidies are not extended. Nationwide, that figure is about 5 million, Levin said.
Current Negotiations
Right now, Congress is negotiating on how to avoid a government shutdown on Sept. 30, when federal funding runs out. To do that, lawmakers are weighing a short-term spending measure while they continue work on a full-year funding package — and that’s one vehicle where lawmakers could attach a subsidies extension. The Associated Press contributed to this report.
Conclusion
The debate over the extension of health subsidies is a pressing issue that affects millions of Americans, including those in Southern California. Lawmakers are divided on the matter, with some pushing for a permanent extension and others advocating for a short-term solution. As the deadline for a government shutdown approaches, it remains to be seen how Congress will resolve this critical issue.
FAQs
Q: What are the premium tax credits, and why are they important?
A: The premium tax credits are subsidies that help offset the cost of health insurance premiums for individuals and families who purchase coverage through the Affordable Care Act’s marketplace. They are crucial for making health care affordable for millions of Americans.
Q: Why are the premium tax credits set to expire?
A: The premium tax credits were increased and extended during the Biden administration, but they are set to expire at the end of 2025 unless Congress takes action to extend them.
Q: What are the potential consequences if the premium tax credits are not extended?
A: If the premium tax credits are not extended, millions of Americans could lose their health insurance coverage, and health care costs could become even more unaffordable for many individuals and families.
Q: What is the current status of the negotiations over the premium tax credits?
A: Congress is currently negotiating a short-term spending measure to avoid a government shutdown, and lawmakers are considering attaching a subsidies extension to this measure. However, the outcome of these negotiations is uncertain, and it remains to be seen how the issue will be resolved.
