Health insurance battle at heart of shutdown

Health care insurance and coverage is at the heart of the current U.S. government shutdown, which has resulted in furloughs and more recently — lapses in food assistance benefits.

The disagreement remains over health insurance, more specifically whether enhanced federal subsidies for the Affordable Care Act — also known as Obamacare — should be extended beyond their expiration date at year's end.

Democrats want the subsidies extended for an estimated 24 million people in the U.S., and refuse to vote on the funding bill until they are, while Republicans insist that they vote first, before any further discussions on the health insurance tax credits.

The government shutdown which began Oct. 1, meanwhile, continues to stretch on with no resolution in sight.

"We need to end this shutdown now," said Congresswoman Jill Tokuda in a phone call from Maui. "We need Republicans to come back to Washington, D.C., and actually sit at the table. This is a choice that they're making to shut down government, to not even talk about how we save health care in districts across the country, in their own districts."

Tokuda supports the subsidies as a lifeline for Hawaii's working families, and believes they should not only be extended, but made permanent.

"The immediate reality is that something must be done to address rising healthcare costs, and Trump's unchecked influence over federal spending, both of which continue to destabilize the lives and livelihoods of Hawaii residents," she had said in a statement when the shutdown began. "That's why Democrats will keep fighting to bring Republicans back to the negotiating table to lower costs for working-class Americans and protect the most vulnerable in our communities."

Who's on ACA?

Hawaii has approximately 23,000 residents who receive their health coverage through the Affordable Care Act marketplace, according to the state Department of Health, putting it among smaller markets in the U.S.

Of that total, more than 80% have lower premiums due to the enhanced tax subsidies expiring on Dec. 31. With the enhanced subsidies, which were implemented in 2021, the cost of ACA health insurance is capped at no more than 8.5% of the person's income.

Without subsidies, the monthly premiums for ACA health insurance would rise as much as 114% — or more than double current costs — next year, depending on income, age, and type of plan chosen, according to KFF, a nonpartisan think tank.

Republicans are pushing back due to the costs of the subsidies. The Congressional Budget Office estimates an extension of the ACA subsidies would cost $350 billion over 10 years.

In Hawaii, most people who sign up for the marketplace are self- employed and run their own businesses, according to Dr. Jack Lewin, State Health Planning and Development Agency director.

That includes plumbers who run their own business, real estate agents working on commission, as well as Uber or Lyft drivers who make an income, but do not get health insurance through their employers.

Hawaii actually has one of the lowest uninsured health rates in the U.S., according to Lewin, at about 3.5%.

This is due, in part, to the state's passage of the Prepaid Healthcare Act in 1974 which requires private employers to provide health insurance for employees who work at least 20 hours per week four weeks in a row.

But there are still people who fall through the cracks, and that's where Obamacare came in.

"These are people that are not eligible for the Prepaid Health Care Act or for Medicare or Medicaid," he said. "By definition, people who are self-employed, gig workers, small-business owners and those kinds of folks."

KFF says ACA premiums are rising in 2026 regardless — an average of 30% — for states such as Hawaii that use the federal healthcare.gov platform. But most enrollees would face even sharper increases if enhanced tax credits expire.

If premiums are too high, Lewin expects many will forego health care insurance, which has consequences for Hawaii's health care system.

Wide-ranging impacts

The impacts of people losing health insurance has wide-ranging impacts, leaders said, and will spill over to hospitals and the overall economy.

"If they are uninsured because they can't afford to pay it on their own, then you have a whole series of issues," said Hilton Raethel, president and CEO of the Healthcare Association of Hawaii. "When people put off care, they show up at the ER because don't have money to pay a doctor. They go to the ER because they know they have to be treated in the ER, so that then puts a burden on the hospitals."

Hospitals that receive federal funding must by law stabilize and treat patients in emergency rooms even if they are uninsured and foot the costs.

Raethel said patients that put off preventative care and screenings, historically, tend to end up with more severe illnesses requiring emergency attention — someone with a cold that develops into pneumonia, for instance, or a sore that develops into an abscess, or serious infection.

Private health care insurance premiums overall already are going up, in the midst of the ongoing debate.

"Unfortunately it's happening in Hawaii and it's happening across the country," Raethel said. "The premiums are going up, in many cases, high single digits, low double digits. There are a lot of pressures in costs of health care a lot of insurers did not do well in 2024 and from thereon in financials continuing into 2025."

Additional, hospitals are already anticipating increased costs, he said, and are looking ahead at what to scale back, whether it be certain services or potential layoffs.

These increased costs at hospitals have a ripple effect, with potential cost shifts to those who do have private insurance being charged more for the coverage.

Tokuda says in D.C., the halls are empty and tensions are high during the shutdown.

"It's extremely frustrating that we've gone back, ready to reopen government, ready to sit and negotiate and we can't even get them to swear in new members of Congress," she said. "We can't get them to call back all members."

She has been in Hawaii, meeting with air traffic controllers and speaking with nonprofits, businesses and others in the community, and says overall residents are feeling fearful and under constant threat.

"They are generally feeling unsafe right now, given all the threats that they see," she said. "Threats to their health care, to their food money, to the most basic things that have been shut down right now or are on the chopping block."

On the horizon, some 30,000 to 40,000 Hawaii residents also are poised to lose their Medicaid coverage in 2027 due to restrictions and requirements resulting from the passage of H.R.1., or the "big, beautiful bill."

That translates to a potential loss of $400 million in federal Medicaid spending in the state that will strain Hawaii hospitals and community health centers.

The bill cuts federal spending on Medicaid as well as Children's Health Insurance Program benefits by $1 trillion after eliminating some 10.5 million people from the programs by 2034, according to the Congressional Budget Office.

In Hawaii, an estimated 400,000 residents representing nearly 30% of the population, are currently enrolled in Med-QUEST, the state's Medicaid program, which covers low-income children and adults and the disabled, among others.

Gov. Josh Green and other leaders in Hawaii oppose cuts to health care, and are proponents of health care coverage for all as beneficial to the state.

"We believe that as a state, we're much better off if people do have insurance," said Raethel, "and we've demonstrated here in Hawaii, when people do have insurance with very low uninsured rates, that they get preventative care, they get their screenings, they get their vaccinations and it's better for everyone if you have insurance. We're very strong supporters of broad based insurance."

OBAMACARE IN HAWAIIAN ISLANDS

Affordable Care Act enrollees: 23,000

With federal enhanced subsidies, the cost of ACA health insurance is capped at no more than 8.5% of a person's income. Subsidies are set to expire Dec. 31.

Without federal enhanced subsidies, premiums for ACA health insurance could more than double.

Many enrollees of the ACA are self-employed, run small businesses, or are part of the gig economy. Undocumented immigrants are not eligible for Marketplace coverage.

State's uninsured rate: 3.2% (2023)

Enrollment in ACA opened Saturday, with the window open until Dec. 15 for Jan. 1 coverage. While some states run their own ACA health care exchange, Hawaii uses the federal platform at healthcare.gov.

Sources: State Department of Health, KFF, healthcare.gov