Democrats, Republicans in standoff over shutdown

EYER The Washington Post

The standoff between the two parties over how to end the government shutdown is rapidly approaching a crucial deadline - and meeting it appears all but out of reach.

Democrats are demanding Republicans agree to extend Affordable Care Act health insurance subsidies, in exchange for their votes to reopen the government, by Nov. 1. That's when Americans can start signing up for their 2026 health coverage; Democrats warn that millions of people will face higher premiums next year if the subsidies are allowed to expire.

Republicans have refused to negotiate over extending the subsidies until Democrats vote to end a shutdown that has dragged on for more than three weeks.

Sen. Mike Rounds, R-South Dakota, who has been involved in conversations with Democrats about how to end the impasse, said he did not see how the subsidies could be extended by Nov. 1.

"I think it's going to be very difficult to get done," Rounds said.

If lawmakers unexpectedly agree to extend the subsidies in the coming days, there probably would be enough time for online marketplaces in many states to incorporate subsidies in their 2026 prices before Nov. 1.

Without an extension, Americans on subsidized plans would see their premiums double on average, according to an analysis by KFF, a health care policy think tank.

Republicans have demanded changes to the subsidies that Democrats may find tough to swallow, complicating the road to extending them. Some Republicans, for instance, want to prevent health insurance plans eligible for the subsidies from covering abortion.

Republicans have also called for changes that they argue would help combat fraud. (The Congressional Budget Office estimates that 2.3 million enrollees in ACA plans improperly claimed subsidies this year by intentionally overstating their income.) Those ideas include income caps and rules ensuring that anyone who enrolls in a subsidized plan pays a minimum out-of-pocket premium.

Some of the changes Republicans are seeking could take weeks to put in place, according to Ellen Montz, a former deputy administrator of the Centers for Medicare and Medicaid Services during the Biden administration who oversaw the federal health care marketplace.

"It is not a simple thing to do," Montz said. "I do think anything short of kind of a clean extension [of the subsidies] we don't really have any hope of implementing by open enrollment."

As time runs short, some Democrats have started pressing for a "clean extension" that would keep the subsidies in place unchanged for one year and allow Democrats and Republicans to work everything else out later.

"Time is running out," said Sen. Angus King, I-Maine, who caucuses with Democrats. "That's why I think probably the most expeditious solution would be a simple one-year extension, and then there could be time for discussion of the various changes that the Republicans, particularly, are talking about."

North Dakota Insurance Commissioner Jon Godfread supports extending the subsidies unchanged for a year and said it is the most viable option for minimizing disruptions to the market.

Health insurance companies have already filed rates for next year. If Congress changes how the subsidies work now, Godfread said, states would need to give insurers time to revise their rates, leaving consumers in limbo about how much their insurance will cost next year.

"We'd certainly turn it around as quickly as we possibly could," he said. "But given the short time frame here and even ahead of the end of the year, I think the realistic solution is to extend those subsidies for at least a year and then we can figure out health care reform next year."

Republicans are also divided over whether to extend the subsidies at all. Some of them have urged to Republican leadership to make negotiations on the subsidies a priority, while others oppose the Affordable Care Act and would prefer to let the subsidies expire.

"If making changes means you don't extend them, I'm all for that kind of change," said Sen. Ron Johnson (R-Wisconsin).

Any deal to extend the subsidies would need President Donald Trump's support - and Sen. Tommy Tuberville, R-Alabama, said the White House has not weighed in yet on what changes Trump would like to see. Trump is set to leave for Asia at the end of the week.

Congress could still extend the subsidies after Nov. 1. House Speaker Mike John-son, R-Louisiana, has said he sees the deadline for extending the subsidies as the end of the year, when they expire.

Senate Majority Leader John Thune, R-South Dakota, has echoed that sentiment, arguing that Democrats are wasting time the parties could have used to negotiate a deal to extend the subsidies by refusing to reopen the government.

"The clock's ticking," Thune told reporters this week. "They're getting up against the deadline, which makes it increasingly clear to me that they're not interested in a solution. They're interested in having a political issue that they can use in the campaigns."

Advocates of extending the subsidies warn that the longer Congress waits, the more Americans will be shown much higher premiums for next year - and potentially decide to go without insurance. Many states have started mailing letters outlining how much health insurance rates will rise next year if Congress does not extend the subsidies.

Americans are "going to have to be making a decision as to whether or not they bite the bullet and they pay these doubling, tripling, increased premiums or whether they just say, 'I'm going to risk it, I'm healthy and I hope I'm going to stay that way, and I'm going to drop my coverage,'" Sen. Lisa Murkowski (R-Alaska), who has pushed to extend the subsidies, told reporters. "That's the worry."

Some Democrats argue that Republicans will feel greater pressure to negotiate after Nov. 1, when many Americans realize their premiums will skyrocket unless Congress takes action.

"I think that is when Republicans who kept their heads in the sand to this point are really going to hear from people," Sen. Patty Murray, D-Washington, told reporters.

But Sen. Peter Welch, D-Vermont, said he hopes the disruptions that might be caused by extending the subsidies after Nov. 1 will motivate Congress to take action before the deadline.

"The later it gets, the more chaos that's going to be created," he said.