The shutdown of the federal government (now on day 35) centers on whether to extend the enhanced premium tax credits that were introduced in 2021 to support the Affordable Care Act to help low- and middle-income Americans purchase marketplace health insurance. These credits are set to expire at the end of 2025 unless Congress acts. Without the extension, insurers expect significant premium increases for many enrollees. Poll data show strong public support: about 78% of U.S. adults say the tax credits should be extended, including majorities of Democrats, independents and a sizable share of Republicans. The looming expiration of ACA premium tax credits is a material risk for hospitals and health systems—in terms of coverage loss, volume shifts and financial exposure.
On the legislative front, a bipartisan group of House members recently released a “statement of principles” proposing a two-year extension of the credits plus eligibility caps (income between ~$200,000-$400,000) and fraud/oversight measures. Speaker of the House Mike Johnson and President Donald Trump thus far have refused to negotiate with the government closed, preferring a clean bill to reopen the government and the opportunity to negotiate with operations up and running. Democrats on the other hand, have stood firm that any bill to reopen the government must include an extension for the subsidies. That is the impasse we have found ourselves in these past 35 days.
Why this matters for hospitals and health systems
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Premium hikes = reduced coverage: If subsidies lapse and premiums rise steeply, more patients may become uninsured or under-insured. That increases uncompensated care risk and may shift the payer mix.
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Marketplace enrollee changes: Many self-employed, small business or part-time workers rely on marketplace plans. Uncertainty in subsidies can drive enrollment volatility, affecting network planning and volume forecasting.
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Chronic care / high-cost patients: Coverage disruptions among vulnerable citizens—especially those with chronic illnesses—can lead to delayed care, higher acuity admissions and downstream cost shifts to hospitals.
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Policy and operational risk: The timing of the subsidy decision intersects with open-enrollment, state-level marketplace operations, and payer negotiations. Hospitals need to be aware of potential volatility in volumes and reimbursement.
What to watch and what you can do
Actions for health system leaders:
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Monitor legislative progress closely: recognize that the subsidy expiration is driving bipartisan interest and that hospital sector risk is rising if no deal occurs.
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Engage with state marketplace administrators and payers to understand how they are contingent-planning for premium spikes or coverage losses.
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Coordinate with your finance and risk teams: model scenarios where marketplace enrollee volumes shrink or shift to Medicaid/uninsured.
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Communicate with community physicians and care-management teams: if coverage disruptions increase, prepare for greater demand for safety-net services, delayed care presentations, or changes in treatment adherence.
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Amplify your voice: health systems are stakeholders; consider advocacy—highlight to senators, House members and state legislators how subsidy stability helps maintain access and reduce uncompensated care burdens.
Key levers & policy-watch items:
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The income cut-off and duration of extension are decision points (e.g., two years vs longer).
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Oversight provisions and anti-fraud measures may be packaged as part of the extension deal.
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Because subsidies affect marketplace premiums, state regulators and insurers may adjust their rate filings ahead of decisions—watch those rate-filing windows.
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Timing matters: if Congress delays, the uncertainty could itself drive enrollee drop-out or rate hikes ahead of formal changes.