What the End of Obamacare Subsidies Could Mean for Your Health Coverage

The longest government shutdown in U.S. history may soon come to an end after eight Democrats are poised to join their Republican colleagues in a deal that will abandon their party’s key demand over healthcare coverage.

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At the center of the impasse has been the Republican Party’s refusal to concede to a Democratic Party demand to extend federal subsidies for people buying healthcare on the Affordable Care Act (ACA) marketplace.

These tax credits were added during the pandemic, extended by Congress through the Inflation Reduction Act (IRA) in 2022, and are set to expire at the end of this year. 

The Democratic Party had refused to pass President Donald Trump’s spending bill until they were extended, and Republicans dug in, spreading false claims about what Democrats were demanding, even as polls showed most people blamed Trump and his party for the shutdown.

Read More: Why Obamacare Prices Could Surge for Millions Next Year

On Sunday, the eight Democrats backed down on that demand, at least for now. In exchange for the votes to end the shutdown, Senate Majority Leader John Thune—a Republican from South Dakota—promised a vote in mid-December on an extension bill for ACA subsidies of Democrats’ choosing.

The deal only delays the fight, rather than solves it. Democrat Tim Kaine, one of the eight, defended his vote to end the shutdown, saying the deal “guarantees a vote to extend Affordable Care Act premium tax credits, which Republicans weren’t willing to do,” and he expressed confidence that that vote would ultimately result in an extension of those subsidies.

Healthcare costs could triple for millions of people

The subsidies have been essential for people buying healthcare through Obamacare. In 2025, 24 million individuals obtained insurance through the ACA marketplace, and the Center on Budget and Policy reports that 93% of enrollees received tax credits that helped reduce their costs.

If Obamacare subsidies do expire, though, marketplace estimates say that premiums could double—or even triple— for those 22 million Americans who receive enhanced subsidies that make health premiums cheaper. According to health policy research group KFF 57% of ACA marketplace enrollees live in Republican congressional districts.

Older adults and seniors are particularly at risk of losing access to their healthcare, since the subsidies spurred a 50% reduction in the uninsured rate among Americans 50 to 64. 

The Congressional Budget Office (CBO) also estimates that, with ACA expirations, about 4 million more people would become uninsured than would otherwise be the case.

Read more: Why It Could Take All Week to End the Government Shutdown

This increased uninsured rate could have various consequences, including higher Medicare costs and strains on hospitals nationwide.

Nonprofit Medicare Rights Center summarizes that with this increase in uninsured people, “the coverage losses would mean higher Medicare costs, because more people would enter the program in poorer health and needing more expensive interventions.”

And as the risk pool worsens, hospitals and state and local governments could end up bearing the brunt of these ACA changes.

“There’s a follow-on effect of loss of insurance that ends up affecting governments and health providers in the local community,” says associate professor at Harvard Kennedy School of Government Mark Shepard.

Insurers across the market—not just those relying on ACA subsidies—are bracing for the effects of the expiration, as volatility is expected. This could mean rising premiums for anyone on the ACA marketplace, regardless of reliance on subsidies, and for those on off-exchange plans, too, which tend to match their rates to ACA-compliant plans.

Furthermore, as some people relied more on employer-sponsored insurance due to rising premiums in the ACA marketplace, employers facing higher enrollment and costs may shift some of that burden to their workers.

A September report from Mercer found that total health benefit costs per employee is expected to rise 6.5% on average in 2026, the highest rate increase in over 15 years. Based on a survey of over 1,700 US employers, 59% of employers will make cost-cutting changes to their plans in 2026.