Government reopening brings relief but no agreement on ACA subsidies

The Buzz This Week

On Wednesday night, the federal government reopened after 43 days—the longest government shutdown in history. Narrowly passed by the US Senate and House of Representatives, the continuing resolution (CR) funds a trio of spending bills through the end of the fiscal year and the rest of the government through January 30, setting up another potential impasse at that time.

The CR temporarily extends critical healthcare programs, including telehealth flexibilities, hospital at home reimbursement, and community health center funding through the end of the fiscal year. Program lapses during the shutdown had caused considerable disruptions to care delivery and health system operations, including requiring patients receiving acute care at home to return to traditional inpatient facilities.

Notably absent from the bill is the renewal of expiring subsidies for Affordable Care Act (ACA) health insurance policies set to expire at year’s end. Since the subsidies were put in place in 2021, ACA enrollment has more than doubled from about 11 to over 24 million people, the vast majority of whom receive an enhanced premium tax credit.

Without the subsidy extension, ACA enrollees face average premium increases of 26% in 2026. Currently subsidized enrollees (approximately 22 million people) are seeing their monthly premium payments more than double.

Republican leaders have pledged to hold a separate vote by mid-December on renewing the expiring healthcare tax credits, though the informal deal is not part of the legislative text. Negotiations are expected to begin immediately, with Republican proposals expected to include alternatives that cap or discontinue subsidies. Other proposals may significantly change the ACA or redirect federal healthcare funds as direct payments to households.

As part of the agreement, Supplemental Nutrition Assistance Program (SNAP) benefits will be funded through the end of the fiscal year, as part of the agriculture bill. This follows weeks of halted funding and legal battles regarding the country’s primary nutrition support program threatening a critical driver of health for 42 million (or 1 in 8) Americans.

The Food and Drug Administration will also be funded through the end of the fiscal year, while funding for other critical health agencies—including the National Institutes of Health, National Cancer Institute, Advanced Research Projects Agency for Health, and the Centers for Disease Control and Prevention—is extended only temporarily through January 30. Funding levels for 2026 are still uncertain.

Included in the bill is a provision to waive “pay-as-you-go” budget rules that would have triggered nearly $500 billion in Medicare cuts to offset deficit spending in the OBBBA tax law enacted earlier this year.

Why It Matters

The reopening of the federal government brings relief as thousands of federal employees return to work, funding resumes for essential healthcare programs, and food assistance benefits are reinstated.

Although funds have been officially appropriated, it will take time for the government to make back payments and programs to ramp up to normal operations. Many agency offices are reportedly confronting backlogs of undone tasks and difficulty logging into online systems, portending an even slower ramp up for offices that were already short staffed before the shutdown began.

Food aid is unlikely to resume immediately, as states have indicated that they may require a week or longer to update beneficiary files and replenish benefits amid expected bottlenecks. Millions of Americans are still awaiting their November SNAP benefits that the administration resisted paying in full.

With ongoing uncertainty about the fate of ACA subsidies, the more than 24 million people who buy health insurance through the federal and state health insurance exchanges continue to face steep premium spikes and uncertainty as they consider coverage for next year.

The timing is particularly challenging for consumers. Open enrollment began November 1 amid the shutdown, and decisions in most states must be made by December 15 to be covered at the start of the new year. The price increases may cause many to drop coverage and others to buy lower tier plans with smaller upfront premiums and much higher deductibles for individuals and families.

If the subsidies are discontinued, the Congressional Budget Office projects that more than 2 million people would lose health insurance coverage next year, and 4 million would join the ranks of the uninsured over the next decade. This is on top of the 27 million Americans currently uninsured and the estimated 40% of Americans with some level of medical debt.

Restoration of funding for Medicare’s telehealth and hospital at home waiver programs will allow health systems to restart these programs. Popular among patients and families, telehealth and hospital at home programs have been shown to guide patients to the most appropriate care setting and support appropriate continuity of care, among other benefits. While these programs have broad support, the stopgap funding measure only runs through the end of January, leaving continued funding uncertain.

Meanwhile, health systems and health plans are already feeling the effects of delayed care and coverage churn resulting from cost increases and funding uncertainty. Recent reports show increases in charity care and bad debt, as well as care delays and rising ED visit complexity, which will be exacerbated by increasing numbers of uninsured and underinsured.

Skyrocketing premiums and healthcare costs will remain at the center of the national debate as both Republicans and Democrats brace for a potential additional fight when the interim funding bill runs out January 30. Even as the government reopens, the issue of healthcare affordability is here to stay and will be a dominant issue in the 2026 midterm elections.