subsidy

Californians renewing their public health plans or who plan to sign up for the first time will be in for sticker shock when open enrollment begins on Saturday. Monthly premiums for federally subsidized plans available on the Covered California exchange — often referred to as Obamacare — will soar by 97% on average for 2026.

The skyrocketing premiums come as a result of a conflict at the center of the current federal government shutdown, which began on Oct. 1: a budgetary impasse between the Republican majority and Democrats over whether to preserve enhanced, Biden-era tax credits that expanded healthcare eligibility to millions more Americans and kept monthly insurance costs affordable for existing policyholders. About 1.7 million of the 1.9 million Californians currently on a Covered California plan benefit from the tax credits.

Open enrollment for the coming year runs from Nov. 1 until Jan. 31. It’s traditionally the period when members compare options and make changes to existing plans and when new members opt in.

Only this time, the government shutdown has stirred uncertainty about the fate of the subsidies, first introduced during the COVID-19 pandemic and which have been keeping policy costs low, but will expire at the end of the year if lawmakers in Washington don’t act to extend them.

Californians window shopping on the exchange’s consumer homepage will have to make some tough decisions, said Covered California Executive Director Jessica Altman. The loss of the tax credits to subsidize premiums only adds to what can already be a complicated, time-consuming and frustrating process.

Even if the subsidies remained intact, premiums for plans offered by Covered California were set to rise by roughly 10% for 2026, due to spikes in drug prices and other medical services, Altman said.

Without the subsidies, Covered California said its members who receive financial assistance will see their monthly premiums jump by an additional $125 a month, on average, for 2026.

The organization projects that the cost increases will lead many Californians to simply go without coverage.

“Californians are going to be facing a double whammy: premiums going up and tax credits going away,” Altman said. “We estimate that as many as 400,000 of our current enrollees will disenroll and effectively be priced out of the health insurance that they have today. That is a devastating outcome.”

Indeed, the premium spike threatens to lock out the very Americans that the 2010 Affordable Care Act — President Obama’s signature domestic policy win — was intended to help, said Altman. That includes people who earn too much to qualify for Medicaid but who either make too little to afford a private plan or don’t work for an employer that pays a portion of the premiums.

That’s a broad swath of Californians — including many bartenders and hairdressers, small business owners and their employees, farmers and farm workers, freelancers, ride-share drivers, and those working multiple part-time gigs to make ends meet. The policy change will also affect Californians who use the healthcare system more frequently because they have ongoing conditions that are costly to treat.

By raising the tax-credit eligibility threshold to include Americans earning more than 400% of the federal poverty level, the Biden-era subsidies at the heart of the budget stalemate have brought an estimated 160,000 additional middle-income Californians into the system, Covered California said. The enhanced subsidies save members about $2.5 billion a year overall in out-of-pocket premium expenses, according to the exchange.

California lawmakers have tried to provide some relief from rising Covered California premiums by recently allocating an additional $190 million in state-level tax credits in next year’s budget for individuals who earn up to 150% of the federal poverty level. That would keep monthly premiums consistent with 2025 levels for a person making up to $23,475 a year, or a family of four bringing in $48,225 a year, and provide partial relief for individuals and households making slightly more.

Altman said the state tax credits will help. But it may not be enough. Forecasts from the Urban Institute, a nonprofit research group and think tank, also show a significant drop-off of roughly 400,000 enrolled members in Covered California.

The national outlook is even worse. The Congressional Budget Office warned Congress nearly a year ago that if the enhanced premium subsidies were allowed to expire, the ranks of the uninsured would swell by 2.2 million nationwide in 2026 alone — and by an average of 3.8 million Americans each year from 2026 to 2034.

Organizations that provide affordable Obamacare plans are preparing for Californians to get squeezed out of the system if the expanded subsidies disappear.

L.A. Care, the county’s largest publicly operated health plan, offers Covered California policies for 230,000 mostly lower-income people. About 90% of the Covered California consumers they work with receive subsidies to offset their out-of-pocket healthcare insurance costs, said Martha Santana-Chin, L.A. Care’s CEO. “Unless something drastic happens … a lot of those people are going to fall off of their coverage,” Santana-Chin said.

That outcome would ripple far and wide, she said — thanks to two factors: human behavior and basic economics.

If more and more people choose to go uninsured, more and more people will resort to visiting hospital emergency rooms for non-emergency care, disrupting and overwhelming the healthcare system.

Healthcare providers will be forced to address the cost of treating rising numbers of uninsured people by raising the prices they bill to insurers for patients who have private plans. That means Californians who are not Covered California members and don’t receive other federal healthcare aid will eventually see their premiums spike too, as private insurers pass any added costs down to their customers.

But right now, with the subsidies set to end soon and recent changes to Medicaid eligibility requirements threatening to knock some of the lowest-income Californians off of that system, both Altman and Santana-Chin said their main concern is for those who don’t have alternatives.

In particular, they are concerned about people of color, who are disproportionately represented among low-income Californians, according to the Public Policy Institute of California. Any hike in out-of-pocket insurance costs next year could blow the budget of a family barely getting by.

“$100, $150, $200 — that’s meaningful to people living on fixed incomes,” Altman said. “Where is that money coming from when you’re living paycheck to paycheck?”

WASHINGTON — The first caller on a telephone town hall with Maryland Rep. Andy Harris, leader of the House’s conservative Freedom Caucus, came ready with a question about the Affordable Care Act. Her cousin’s disabled son is at risk of losing the insurance he gained under that law, the caller said.

“Now she’s looking at two or three times the premium that she’s been paying for the insurance,” said the woman, identified as Lisa from Harford County, Md. “I’d love for you to elucidate what the Republicans’ plan is for health insurance?”

Harris, a seven-term Republican, didn’t have a clear answer. “We think the solution is to try to do something to make sure all the premiums go down,” he said, predicting Congress would “probably negotiate some off-ramp” later.

His uncertainty reflected a familiar Republican dilemma: Fifteen years after the Affordable Care Act was enacted, the party remains united in criticizing the law but divided on how to move forward. That tension has come into sharp focus during the government shutdown as Democrats seize on rising premiums to pressure Republicans into extending expiring subsidies for the law, often referred to as Obamacare.

President Trump and GOP leaders say they’ll consider extending the enhanced tax credits that otherwise expire at year’s end — but only after Democrats vote to reopen the government. In the meantime, people enrolled in the plans are already being notified of hefty premium increases for 2026.

As town halls fill with frustrated voters and no clear Republican plan emerges, the issue appears to be gaining political strength heading into next year’s midterm elections.

“Premiums are going up whether it gets extended or not,” said GOP Sen. Rick Scott. “Premiums are going up because healthcare costs are going up. Because Obamacare is a disaster.”

‘Concepts of a plan’

At the center of the shutdown — now in its fourth week with no end in sight — is a Democratic demand that Affordable Care Act subsidies passed in 2021 be extended.

Trump has long promised an alternative. “The cost of Obamacare is out of control, plus, it’s not good Healthcare,” he wrote on Truth Social in November 2023. “I’m seriously looking at alternatives.”

Pressed on healthcare during a September 2024 presidential debate, Trump said he had “concepts of a plan.”

But nearly 10 months into his presidency, that plan has yet to come. Dr. Mehmet Oz, administrator of the Centers for Medicare and Medicaid Services, told NBC on Wednesday, “I fully believe the president has a plan,” but didn’t go into details.

Republicans say they want a broader overhaul of the healthcare system, though such a plan would be difficult to advance before next year. Party leaders have not outlined how they’ll handle the expiring tax credits, insisting they won’t negotiate on the issue until Democrats agree to end the shutdown.

A September analysis from the nonpartisan Congressional Budget Office estimated that permanently extending the tax credits would increase the deficit by $350 billion from 2026 to 2035. The number of people with health insurance would rise by 3.8 million in 2035 if the credits are kept, CBO projected.

House Speaker Mike Johnson told a news conference Monday that the tax credits are “subsidizing bad policy.” Republicans “have a long list of ideas” to address healthcare costs, he said, and are “grabbing the best ideas that we’ve had for years to put it on paper and make it work.”

“We believe in the private sector and the free market and individual providers,” he added.

A growing political issue

With notices of premium spikes landing in mailboxes now and the open enrollment period for Affordable Care Act health plans beginning Nov. 1, the political pressure has been evident in Republican town halls.

In Idaho, Rep. Russ Fulcher told concerned callers that “government-provided healthcare is the wrong path” and that “private healthcare is the right path.” In Texas, freshman Rep. Brandon Gill responded to a caller facing a sharp premium increase by saying Republicans are focused on cutting waste, fraud and abuse.

Harris echoed a message shared by many in his party during his Maryland town hall, saying costs are “just going back to what it was like before COVID.”

But the number of people who rely on Affordable Care Act health insurance has increased markedly since before the pandemic. More than 24 million people were enrolled in the marketplace plans in 2025, up from about 11 million in 2020, according to an analysis from the health care research nonprofit KFF.

Sara from Middleville, Mich., told Rep. John Moolenaar during his town hall that if health insurance premiums go up by as much as 75%, most people will probably go without healthcare. “So how do you address that?” she asked.

Moolenaar, who represents a district he handily won last year, responded: “We have time to negotiate, figure out a plan going forward and I think that’s something that could occur.”

Some Republicans have shown urgent concern. In a letter sent to Johnson, a group of 13 battleground House Republicans wrote that the party must “immediately turn our focus to the growing crisis of health care affordability” once the shutdown ends.

“While we did not create this crisis, we now have both the responsibility and the opportunity to address it,” the lawmakers wrote.

Some Republicans dismiss projections that ACA premiums will more than double without the subsidies, calling them exaggerated and arguing the law has fueled fraud and abuse that must be curbed.

Many Democrats credited their ability to flip the House in 2018 during Trump’s first term to the GOP’s attempt at repealing Obamacare, and they’re forecasting a similar outcome this time.

About 4 in 10 U.S. adults say they trust the Democrats to do a better job handling healthcare, compared with about one-quarter who trust the Republicans more, a recent AP-NORC poll found. About one-quarter trust neither party, and about 1 in 10 trust both equally, according to the poll.

A looming internal GOP fight

Even as GOP leaders pledge to discuss ending the subsidies when the government opens, it’s clear that many Republican lawmakers are adamantly opposed to an extension.

“At least among Republicans, there’s a growing sense that just maintaining the status quo is very destructive,” said Brian Blase, the president of Paragon Health Institute and a former health policy advisor to Trump during his first term.

Michael Cannon, director of health policy studies at the libertarian Cato Institute, said he’s working with multiple congressional offices on alternatives that would let the subsidies end. For example, he wants to expand the Affordable Care Act exemption given to U.S. territories to all 50 states and reintroduce a first-term Trump policy that gave Americans access to short-term health insurance plans outside the Affordable Care Act marketplace.

Cannon declined to name the lawmakers he’s working with, but said he hopes they act on his ideas “sooner than later.”

David McIntosh, president of the influential conservative group Club For Growth, told reporters Thursday that the group has “urged the Republicans not to extend those COVID-era subsidies.”

“We have a big spending problem,” McIntosh said.

“I think most people are going to say, OK, I had a great deal during COVID,” he said. “But now it’s back to business as usual, and I should be paying for healthcare.”

Cappelletti and Swenson write for the Associated Press. Swenson reported from New York.

WASHINGTON — The government shutdown has reopened debate on what has been a central issue for both major political parties in the last 15 years: the future of health coverage under the Affordable Care Act.

Tax credits for people who get health insurance through the marketplaces created by the Affordable Care Act, also known as Obamacare, expire at the end of the year.

Democrats say they won’t vote to reopen the government until Republicans negotiate an extension of the expanded subsidies. Republicans say they won’t negotiate until Democrats vote to reopen the government. Lawmakers in both parties have been working on potential solutions behind the scenes, hoping that leaders will eventually start to talk, but it’s unclear if the two sides could find compromise.

As Congress circles the issue, a poll from The Associated Press-NORC Center for Public Affairs Research found that about 6 in 10 Americans are “extremely” or “very” concerned about their health costs going up in the next year. Those worries extend across age groups and include people with and without health insurance, the poll found.

A look at the subsidies that are expiring, the politics of the ACA and what Congress might do:

Enhanced premium help during the pandemic

Passed in 2010, the ACA was meant to decrease the number of uninsured people in the country and make coverage more affordable for those who don’t have private insurance. The law created state by state exchanges, some of which are run by the individual states, to try to increase the pool of the insured and bring down rates.

In 2021, when Democrats controlled Congress and the White House during the COVID-19 pandemic, they expanded premium help that was already in the law. The changes included eliminating premiums for some lower-income enrollees, ensuring that higher earners paid no more than 8.5% of their income and expanding eligibility for middle-class earners.

The expanded subsidies pushed enrollment to new levels and drove the rate of uninsured people to a historic low. This year, a record 24 million people have signed up for insurance coverage through the ACA, in large part because billions of dollars in subsidies have made the plans more affordable for many people.

If the tax credits expire, annual out-of-pocket premiums are estimated to increase by 114% — an average of $1,016 — next year, according to an analysis from KFF.

Democrats push to extend subsidies

Democrats extended those tax credits in 2022 for another three years but were not able to make them permanent. The credits are set to expire Jan. 1, with Republicans now in full control.

Lacking in power and sensing a political opportunity, Democrats used some of their only leverage and forced a government shutdown over the issue when federal funding ran out on Oct. 1. They say they won’t vote for a House-passed bill to reopen the government until Republicans give them some certainty that the subsidies will be extended.

Democrats introduced legislation in September to permanently extend the premium tax credits, but they have suggested that they are open to a shorter period.

“We need a serious negotiation,” Senate Democratic leader Chuck Schumer has repeatedly said.

Republicans try to scale the ACA back, again

The Democratic demands on health care have reignited longstanding Republican complaints about the ACA, which they have campaigned against for years and tried and failed to repeal in 2017. Many in the party say that if Congress is going to act, they want to scrap the expanded subsidies and overhaul the entire law.

The problem is not the expiring subsidies but “the cost of health care,” Republican Sen. Rick Scott of Florida said Tuesday.

In a virtual briefing Tuesday, the libertarian Cato Institute and the conservative Paragon Health Institute branded the subsidies as President Joe Biden’s “COVID credits” and claimed they’ve enabled fraudsters to sign people up for fully subsidized plans without their knowledge.

Others have pitched more modest proposals that could potentially win over some Democrats. Senate Majority Leader John Thune, R-S.D., has said he is open to extending the subsidies with changes, including lower income limits and a stop to auto-enrollment that may sign up people who don’t need the coverage.

The ACA is “in desperate need of reform,” Thune has said.

House Republicans are considering their own ideas for reforming the ACA, including proposals for phasing out the subsidies for new enrollees. And they have begun to discuss whether to combine health care reforms with a new government funding bill and send it to the Senate for consideration once they return to Washington.

“We will probably negotiate some off-ramp” to ease the transition back to pre-COVID-19 levels, said Maryland Rep. Andy Harris, the head of the conservative House Freedom Caucus, during a virtual town hall Tuesday.

Is compromise possible?

A number of Republicans want to extend the subsidies. Sen. Josh Hawley, R-Mo., said most people who are using the exchanges created by the ACA “don’t really have another option, and it’s already really, really expensive. So I think there are things we can do to reform the program.”

Hawley said he had been having conversations with other senators about what those changes could be, including proposals for income limits, which he said he sees as a “very reasonable.”

Bipartisan groups of lawmakers have been discussing the income limits and other ideas, including making the lowest-income people pay very low premiums instead of nothing. Some Republicans have advocated for that change to ensure that all enrollees are aware they have coverage and need it. Other proposals would extend the subsidies for a year or two or slowly phase them out.

It’s unclear if any of those ideas could gain traction on both sides — or any interest from the White House, where President Donald Trump has remained mostly disengaged. Despite the public stalemate, though, lawmakers are feeling increased urgency to find a solution as the Nov. 1 open enrollment date approaches.

Democratic Sen. Jeanne Shaheen of New Hampshire has been talking to lawmakers since the shutdown began, trying to find areas of compromise. On Tuesday, she suggested that Congress could also look at extending the enrollment dates for the ACA since Congress is stalled on the subsidies.

“These costs are going to affect all of us, and it’s going to affect our health care system,” she said.

Jalonick writes for the Associated Press. AP writers Lisa Mascaro and Joey Cappelletti in Washington and Ali Swenson in New York contributed to this report.

WASHINGTON — As the government shutdown enters its fourth week, Senate Republicans are headed to the White House on Tuesday — not for urgent talks on how to end it but for a display of unity with President Trump as they refuse to negotiate on any Democratic demands.

Senate Democrats, too, are confident in their strategy to keep voting against a House-passed bill that would reopen the government until Republicans, including Trump, engage them on extending health care subsidies that expire at the end of the year.

With both sides showing no signs of movement, it’s unclear how long the stalemate will last — even as hundreds of thousands of federal workers will miss another paycheck in the coming days and states are sounding warnings that key federal programs will soon lapse completely. And the lunch meeting in the White House Rose Garden appears unlikely, for now, to lead to a bipartisan resolution as Senate Republicans are dug in and Trump has followed their lead.

Asked about the message at lunch, Sen. John Barrasso of Wyoming, second in Senate GOP leadership, told Fox News Channel’s “Fox & Friends” on Tuesday that it will be, “Republicans are united, and I expect the president to say, ‘Stand strong.’”

Senate Republican leader John Thune, of South Dakota said on Monday that he thinks Trump is ready to “get involved on having the discussion” about extending the subsidies. “But I don’t think they are prepared to do that until (Democrats) open up the government,” he said.

Missed paychecks and programs running out of money

While Capitol Hill remains at a standstill, the effects of the shutdown are worsening.

Federal workers are set to miss additional paychecks amid total uncertainty about when they might eventually get paid. Government services like the Special Supplemental Nutrition Program for Women, Infants and Children, known as WIC, and Head Start preschool programs that serve needy families are facing potential cutoffs in funding. On Monday, Energy Secretary Chris Wright said the National Nuclear Security Administration is furloughing 1,400 federal workers. The Federal Aviation Administration has reported air controller shortages and flight delays in cities across the United States.

And as the shutdown keeps future health costs in limbo for millions of Americans, most U.S. adults are worried about health care becoming more expensive, according to a new Associated Press-NORC Center for Public Affairs Research poll, as they make decisions about next year’s health coverage.

Still, there has been little urgency in Washington as each side believes the other will eventually cave.

“Our position remains the same: We want to end the shutdown as soon as we can and fix the ACA premium crisis that looms over 20 million hardworking Americans,” said Senate Democratic leader Chuck Schumer, D-N.Y., on Monday, referring to the expanded Affordable Care Act subsidies that expire in December.

Schumer called the White House meeting a “pep rally” and said it was “shameful” that House Speaker Mike Johnson, R-La., has kept the House out of town during the shutdown.

November deadlines

Members of both parties acknowledge that as the shutdown drags on, it is becoming less likely every day that Congress will be able to either extend the subsidies or fund the government through the regular appropriations process. The House GOP bill that Senate Democrats have now rejected 11 times would only keep the government open through Nov. 21.

Thune on Monday hinted that Republicans may propose a longer extension of current funding instead of passing individual spending bills if the shutdown doesn’t end soon. Congress would need to pass an extension beyond Nov. 21, he said, “if not something on a much longer-term basis.”

Democrats are focused on Nov. 1, when next year’s enrollment period for the ACA coverage begins and millions of people will sign up for their coverage without the expanded subsidy help that began during the COVID-19 pandemic. Once those sign-ups begin, they say, it would be much harder to restore the subsidies even if they did have a bipartisan compromise.

“Very soon Americans are going to have to make some really difficult choices about which health care plan they choose for next year,” Schumer said.

What about Trump?

Tuesday’s White House meeting will be a chance for Republican senators to engage with the president on the shutdown after he has been more involved in foreign policy and other issues.

The president last week dismissed Democratic demands as “crazy,” adding, “We’re just not going to do it.”

North Dakota Sen. John Hoeven said that Republican senators will talk strategy with the president at Tuesday’s lunch. “Obviously, we’ll talk to him about it, and he’ll give us his ideas, and we’ll talk about ours,” Hoeven said. “Anything we can do to try to get Democrats to join us” and pass the Republican bill to reopen the government, Hoeven said.

Still, GOP lawmakers expect Trump to stay in line with their current posture to reject negotiations until the government is open.

“Until they put something reasonable on the table to talk about, I don’t think there’s anything to talk about,” said Louisiana Sen. John Kennedy.

Democrats say Trump has to be more involved for the government to reopen.

“He needs to get off the sidelines, get off the golf course,” said House Democratic leader Hakeem Jeffries, D-N.Y. “We know that House and Senate Republicans don’t do anything without getting permission from their boss, Donald J. Trump.”

Jalonick writes for the Associated Press. AP writers Kevin Freking, Stephen Groves and Matt Brown contributed to this report.

WASHINGTON — Senate Democrats are poised for the 10th time Thursday to reject a stopgap spending bill that would reopen the government, insisting they won’t back away from demands that Congress take up healthcare benefits.

The repetition of votes on the funding bill has become a daily drumbeat in Congress, underscoring how intractable the situation has become. It has been at times the only item on the agenda for the Senate floor, while House Republicans have left Washington altogether. The standoff has lasted over two weeks, leaving hundreds of thousands of federal workers furloughed, even more without a guaranteed payday and Congress essentially paralyzed.

“Every day that goes by, there are more and more Americans who are getting smaller and smaller paychecks,” said Senate Majority Leader John Thune, adding that there have been thousands of flight delays across the country as well.

Thune, a South Dakota Republican, again and again has tried to pressure Democrats to break from their strategy of voting against the stopgap funding bill. It hasn’t worked. And while some bipartisan talks have been ongoing about potential compromises on healthcare, they haven’t produced any meaningful progress toward reopening the government. Thune has also offered to hold a later vote on extending subsidies for health plans offered under Affordable Care Act marketplaces, but said he would not “guarantee a result or an outcome.”

Democrats say they won’t budge until they get a guarantee on extending the tax credits for the health plans. They warn that millions of Americans who buy their own health insurance — such as small business owners, farmers and contractors — will see large increases when premium prices go out in the coming weeks. Looking ahead to a Nov. 1 deadline in most states, they think voters will demand that Republicans enter into serious negotiations.

“The ACA crisis is looming over everyone’s head, and yet Republicans seem ready to let people’s premiums spike,” said Senate Democratic leader Chuck Schumer in a floor speech.

Still, Thune was also trying a different tack Thursday with a vote to proceed to appropriations bills — a move that could grease the Senate’s gears into some action or just deepen the divide between the two parties.

A deadline for subsidies on health plans

Democrats have rallied around their priorities on healthcare as they hold out against voting for a Republican bill that would reopen the government. Yet they also warn that the time to strike a deal to prevent large increases for many health plans is drawing short.

When they controlled Congress during the pandemic, Democrats boosted subsidies for Affordable Care Act health plans. It pushed enrollment under President Obama’s signature healthcare law to new levels and drove the rate of uninsured people to a historic low. Nearly 24 million people currently get their health insurance from subsidized marketplaces, according to healthcare research nonprofit KFF.

Democrats — and some Republicans — are worried that many of those people will forgo insurance if the price rises dramatically. While the tax credits don’t expire until next year, health insurers will soon send out notices of the price increases. In most states, they go out Nov. 1.

Sen. Patty Murray, the top Democrat on the Senate Appropriations Committee, said she has heard from “families who are absolutely panicking about their premiums that are doubling.”

“They are small business owners who are having to think about abandoning the job they love to get employer-sponsored healthcare elsewhere or just forgoing coverage altogether,” she added.

Murray also said that if many people decide to leave their health plan, it could have an effect across medical insurance because the pool of people under health plans will shrink. That could result in higher prices across the board, she said.

Some Republicans have acknowledged that the expiration of the tax credits could be a problem and floated potential compromises to address it, but there is hardly a consensus among the GOP.

House Speaker Mike Johnson (R-La.) this week called the COVID-era subsidies a “boondoggle,” adding that “when you subsidize the healthcare system and you pay insurance companies more, the prices increase.”

President Trump has said he would “like to see a deal done for great healthcare,” but has not meaningfully weighed in on the debate. And Thune has insisted that Democrats first vote to reopen the government before entering any negotiations on healthcare.

If Congress were to engage in negotiations on significant changes to healthcare, it would likely take weeks, if not longer, to work out a compromise.

Votes on appropriations bills

Meanwhile, Senate Republicans are setting up a vote Thursday to proceed to a bill to fund the Defense Department and several other areas of government. This would turn the Senate to Thune’s priority of working through spending bills and potentially pave the way to paying salaries for troops, though the House would eventually need to come back to Washington to vote for a final bill negotiated between the two chambers.

It could also put a crack in Democrats’ resolve. Thune said Thursday, “If they want to stop the defense bill, I don’t think it’s very good optics for them.”

It wasn’t clear whether Democrats would give the support needed to advance the bills. They discussed the idea at their luncheon Wednesday and emerged saying they wanted to review the Republican proposal and make sure it included appropriations that are priorities for them.

While the votes will not bring the Senate any closer to an immediate fix for the government shutdown, it could at least turn their attention to issues where there is some bipartisan agreement.

Still, there was a growing sense on Capitol Hill that an end to the stasis is nowhere in sight.

“So many of you have asked all of us, how will it end?” said House Speaker Johnson. “We have no idea.”

Groves and Jalonick write for the Associated Press.

SACRAMENTO — Though raging thousands of miles to the east, the entrenched stalemate in Washington over federal spending and the ensuing government shutdown has thrust California’s expansive healthcare policies into the center of the pitched, partisan debate.

The Trump administration and the Republican leaders in Congress continue to use California, and the benefits the state has extended to eligible immigrants regardless of their legal status, as a cudgel against Democrats trying to extend federal subsidies for taxpayer-funded healthcare coverage.

President Trump claimed recently that Democrats “want to have illegal aliens come into our country and get massive healthcare at the cost to everybody else.” Democrats called Trump’s assertion an absolute lie, accusing Republicans of wanting to slash federal healthcare benefits to Americans in need to pay for tax breaks for the wealthy.

“California has led the nation in expanding access to affordable healthcare, but Donald Trump is ripping it away,” California Gov. Gavin Newsom said.

In return for their votes to reopen the government, Democratic leaders in Congress want to reverse Medicaid cuts made in Republicans’ tax and spending bill passed this summer and continue subsidies through the Affordable Care Act, a program long targeted by Republicans. The subsidies, which come in the form of a tax credit, help lower health insurance costs for millions of Americans.

Can immigrants in the country illegally enroll in federal healthcare programs?

No. Undocumented immigrants are ineligible for Medicaid, Children’s Health Insurance Program or Medicare, or coverage through the Affordable Care Act, according to KFF, an independent health research organization.

Rep. Kevin Mullin (D-South San Francisco) held a virtual town hall last week in which he highlighted the “misinformation” about immigrants and healthcare.

“I just want to be completely clear that federal funding does not pay for health insurance for undocumented immigrants, period,” Mullin said.

Jessica Altman, executive director of Covered California, said the debate is really over “who can benefit from the federal dollars that are flowing to all states, including California,” to help lower costs for health insurance.

Covered California serves as a marketplace exchange for state residents seeking healthcare insurance under the Affordable Care Act, widely known as Obamacare, allowing them to select from name-brand insurance providers and choose from a variety of coverage plans. The vast majority of Californians receive federal subsidies to lower their premiums, including many middle-income families who had become eligible when Congress expanded the financial assistance in 2021.

Those expanded subsidies will expire at the end of the year, and Democrats are demanding that they be extended as part of any deal to reopen the government before they vote in favor of what is known as a continuing resolution, or a temporary funding bill to keep the federal government running.

“From the very beginning, undocumented or illegal — whatever terminology you want to use — individuals were never eligible for those tax credits, never eligible for those cost-sharing reductions, and in fact, and not even eligible to come onto a marketplace and buy coverage if they paid the full costs,” Altman said.

California does offer state healthcare coverage for undocumented immigrants

Through Medi-Cal, the state’s version of the federal Medicaid program, some medical coverage is offered, regardless of immigration status. The majority of that money comes from the state.

H.D. Palmer, deputy director for external affairs at the California Department of Finance, said the cost to provide Medi-Cal to undocumented immigrants in the current fiscal year is just over $12.5 billion.

State money accounts for $11.2 billion and the remaining difference is reimbursed with federal funding because it’s used to cover emergency services, Palmer explained.

“Under current law, hospitals that receive Medicaid are required to provide emergency care, including labor and delivery, to individuals regardless of their citizenship status,” he said. “That goes back to a budget law that was approved by Congress in 1986 and signed by President Ronald Reagan.”

The 1986 law is called the Emergency Medical Treatment and Active Labor Act, and allows for emergency healthcare for all persons.

Some Republicans have raised other concerns about the state’s use of managed care organization taxes.

The MCO tax is a federally allowable Medicaid funding mechanism that imposes a tax on health insurance providers that charge fixed monthly payments for services and is based on the number of people enrolled in plans each month. The revenue from the tax can then be used to support Medicaid expenditures with federal matching funds.

Critics say California exploits a so-called loophole: By increasing the MCO tax, and subsequently bringing in more matching federal funds, California can then put more of its own state money toward healthcare for undocumented immigrants.

“We are bringing in all those additional federal dollars and then reallocating other money away so that we can provide about $9.6 billion for Medi-Cal for undocumented and illegal immigrants,” said Assemblymember David J. Tangipa (R-Fresno). “The MCO tax was never supposed to be weaponized in that process.”

White House officials also contend that California could not afford to put resources toward benefits for undocumented immigrants if it had not received the extra federal money — a claim Newsom disputes.

“What the president is saying, he’s lying,” Newsom said at a recent event. “Speaker [Mike] Johnson’s lying. They’re lying to the American people. It’s shameful. … I guess they’re trying to connect their displeasure with what California and many other states do with state resources in this space, and that is a very separate conversation.”

California is not alone in offering such healthcare to immigrants in the country illegally

A “small but growing” number of states offer state-funded coverage to certain groups of low-income people regardless of immigration status, according to KFF.

California became the first state in the nation last year to offer healthcare to all low-income undocumented immigrants, an expansion spearheaded by Newsom.

Newsom has since partially walked back that policy after the costs exceeded expectations. Starting in January, most adult Medi-Cal applications will be blocked — although current enrollees can continue to renew — and some adults will be required to pay monthly premiums. Undocumented minors under age 19, who became eligible for Medi-Cal nearly a decade ago, will not be affected by the changes.

The upcoming changes to the state’s policies and the enrollment freeze will help decrease the overall costs, which are projected to fall to about $10.1 billion during the next fiscal year, according to the California Department of Finance.

While the governor’s shift angered his most progressive allies and renewed speculation that he is tacking to the political middle ahead of his expected run for president in 2028, the Democratic-led Legislature approved the Medi-Cal eligibility changes in June.

Public opinion on the issue may also be changing.

Fifty-eight percent of adults in California were opposed to providing healthcare for undocumented immigrants, according to a poll released in June from the nonpartisan Public Policy Institute of California. This was a notable shift, as previous surveys from the institute conducted between 2015 to 2023 showed the majority approved.

Who would lose coverage if the tax credits end and Medicaid cuts aren’t reversed?

Trump’s One Big Beautiful Bill Act, passed by Republicans this summer, ends healthcare subsidies that were extended during the pandemic and makes other cuts to programs. According to the White House, the bill “contains the most important America First healthcare reforms ever enacted.”

“The policies represent a comprehensive effort to address waste, fraud, and abuse to strengthen the healthcare system for the most vulnerable Americans, ensuring that taxpayer dollars are focused on American citizens and do not subsidize healthcare for illegal immigrants,” the White House said in a statement on Oct. 1.

Among other things, the law limits Medicare and other program eligibility to certain groups, including green card holders, effective July 2025. Other lawfully present immigrants, including refugees and asylees, are no longer eligible, according to KFF.

It’s estimated that the eligibility restrictions will result in about 1.4 million lawfully present immigrants becoming uninsured, reduce federal spending by about $131 billion and increase federal revenue by $4.8 billion as of 2034, according to the Congressional Budget Office.

At the same time, a broader group of lawfully present immigrants, including refugees, will lose access to subsidized coverage through the ACA marketplace by January 2027.

Covered California’s Altman estimated that there are about 119,000 immigrants in California who are covered and would lose eligibility for financial assistance.

More broadly, Altman and other healthcare experts predict that healthcare premiums will skyrocket if the ACA tax credits expire.

WASHINGTON — Democrats believe healthcare is an issue that resonates with a majority of Americans as they demand an extension of subsidies for their votes to reopen the shuttered U.S. government. But it is also one of the most intractable issues in Congress — and a real compromise is unlikely to be easy, or quick.

There are some Republicans in Congress who want to extend the higher subsidies, which were first put in place in 2021 amid the COVID-19 pandemic, as millions of people who receive their insurance through the Affordable Care Act marketplaces are set to receive notices that their premiums will increase at the beginning of the year. But many GOP lawmakers are strongly opposed to any extension — and see the debate as a new opportunity to cut back on the program altogether.

“If Republicans govern by poll and fail to grab this moment, they will own it,” wrote Texas Rep. Chip Roy, a Republican, in a letter published in the the Wall Street Journal over the weekend. He encouraged senators not to go “wobbly” on the issue.

“The jig is up, the pandemic is over and my colleagues shouldn’t blink in any other direction,” Roy wrote.

Republicans have been railing against the Affordable Care Act, former President Obama’s signature healthcare law, since it was enacted 15 years ago. But while they have been able to chip away at it, they have not been able to substantially alter it as a record 24 million people are now signed up for insurance coverage through the ACA, in large part because billions of dollars in subsidies have made the plans more affordable for many people.

Now, some of them see the Democrats’ fight as their chance to revisit the issue — putting Republican congressional leaders and President Trump in a complicated position as the government shutdown enters its seventh day and hundreds of thousands of federal workers are going unpaid.

“I am happy to work with Democrats on their Failed Healthcare Policies, or anything else, but first they must allow our Government to reopen,” Trump wrote on social media Monday night, walking back earlier comments saying there were ongoing negotiations with Democrats.

Waiting for the other side to blink

Senate Majority Leader John Thune (R-S.D.) has repeatedly indicated that Republicans are open to extending the subsidies, with reforms, if Democrats would reopen the government. But he has refused to negotiate until that happens — and has suggested Trump will be key to the eventual outcome.

Thune told reporters Monday “there may be a path forward” on ACA subsidies, but stressed, “I think a lot of it would come down to where the White House lands on that.”

Many GOP senators argue the only path forward is to overhaul the law. “The whole problem with all of this is Obamacare,” said Florida Sen. Rick Scott.

Most House Republicans agree, and House Speaker Mike Johnson has been noncommittal on discussions.

“Obamacare is not working,” Johnson said Sunday on NBC’s “Meet the Press.” “We’re trying to fix it.”

Democrats believe that public sentiment is on their side and argue that Trump and Republicans will have to come to the negotiating table as people who are enrolled in the program, many of whom live in Republican districts and states, are notified that their rates will increase.

“All I can tell you is the American people feel very deeply about solving this healthcare crisis,” Schumer said after the Senate rejected a House-passed bill to reopen the government for the fifth time Monday evening. “Every poll we have seen shows they want us to do it, and they feel that the Republicans are far more responsible for the shutdown than we are.”

Bipartisan talks face difficulties

With leaders at odds, some rank-and-file senators in both parties have been in private talks to try to find a way out of the shutdown. Republican Sen. Mike Rounds of South Dakota has suggested extending the subsidies for a year and then phasing them out. Senate Appropriations Committee Chairwoman Susan Collins (R-Maine) has suggested pushing ahead with a group of bipartisan spending bills that are pending and a commitment to discuss the healthcare issue.

But many Democrats say a commitment isn’t good enough, and Republicans say they need deeper reforms — leaving the talks, and the U.S. government, at a standstill.

Maine Sen. Angus King, an Independent who caucuses with Democrats, voted with Republicans to keep the government open. But he said Monday that he might switch his vote to “no” if Republicans do not “offer some real solid evidence that they are going to help us with this crisis” on healthcare.

Republican Sen. Markwayne Mullin of Oklahoma said his party is “not budging,” however. “First and foremost, before we can talk about anything, they need to reopen the government.”

Some Republicans urge action on healthcare

Still, some Republicans say they are open to extending the subsidies — even if they don’t like them — as it becomes clear that their constituents will face rising costs.

“I’m willing to consider various reforms, but I think we have to do something,” said Republican Sen. Josh Hawley of Missouri. He said Congress should address the issue “sooner rather than later” before open enrollment begins Nov. 1.

Rep. Marjorie Taylor Greene (R-Ga.) said she is “not a fan” of Obamacare but indicated she might vote to extend it.

“I’m going to go against everyone on this issue because when the tax credits expire this year my own adult children’s insurance premiums for 2026 are going to DOUBLE, along with all the wonderful families and hard-working people in my district,” she posted on social media Monday evening.

Jalonick writes for the Associated Press. AP writers Lisa Mascaro, Matt Brown, Kevin Freking, Stephen Groves and Joey Cappalletti contributed to this report.

For years, federal subsidies have played a critical role in accelerating the adoption of electric vehicles (EV). Most notably, President Joe Biden’s Inflation Reduction Act included a $7,500 tax credit designed to make EV purchases more affordable and spur demand. Under President Donald Trump, however, policy priorities have shifted. As part of the newly enacted “big, beautiful bill,” the EV tax credit was eliminated as of Sept. 30.

Let’s examine how this policy change could affect Tesla (TSLA -1.41%) and what it could mean for the company’s trajectory going forward.

Image source: Tesla.

Spoiler alert: Tesla crushed Q3 deliveries

Shortly after the legislation was signed into law, I predicted that eliminating the EV tax credit would actually provide Tesla with a short-term boost. The logic was straightforward: Consumers who had been undecided about purchasing an EV would likely accelerate their decisions in order to take advantage of the $7,500 credit before it expired.

According to consensus estimates from FactSet and Bloomberg, Wall Street expected Tesla’s third quarter vehicle deliveries to fall in the range of 439,800 to 447,600 units. In reality, Tesla delivered 497,099 cars during the quarter — absolutely shattering analyst expectations.

In short, the removal of the EV tax credit was far from a death knell for Tesla. Relying solely on subsidies to determine the health of Tesla’s business and its future roadmap is a narrow view of the company’s potential. As the discussion below will show, Tesla’s long-term investment case extends well beyond government incentives.

Tesla’s expanding vision: More than just cars

Investing in Tesla requires shareholders to be fully aligned with Elon Musk’s broader technological ambitions. At its core, Musk’s vision for Tesla is centered on artificial intelligence (AI), robotics, and autonomous systems.

Consider Optimus, Tesla’s humanoid robot project. While still in early development, Optimus is designed as a scalable, general-purpose robot with the potential to augment human labor within factories — boosting productivity and delivering exponential cost savings over time. In fact, Musk himself has touted that Optimus could represent 80% of Tesla’s future value once scaled.

Equally transformative is Tesla’s vision to create a robotaxi network. The company aims to deploy a fleet of fully autonomous vehicles capable of generating recurring revenue streams that far exceed the economics of one-time vehicle sales. If successful, robotaxi could not only disrupt incumbents in the mobility market — such as Lyft, Uber Technologies, DoorDash, or Hertz — but it could also unlock a new business model for Tesla: A software-driven, high-margin service powered by its Full Self-Driving (FSD) platform.

On a deeper level, Tesla’s potential extends beyond physical products and into the intangible realm of machine intelligence. Musk has repeatedly hinted at closer integration between Tesla and his separate venture, xAI — which is developing a large language model (LLM) known as Grok to compete with OpenAI. Such a partnership could meaningfully enhance Tesla’s software stack, enabling a more intelligent and connected ecosystem that spans vehicles, robots, and AI-powered services.

Is Tesla stock a buy now?

The loss of the $7,500 EV subsidy may affect short-term affordability for certain buyer segments, but ultimately it does not fundamentally change Tesla’s long-term investment thesis.

That said, valuation deserves careful attention. As of Oct. 2, Tesla shares were trading near all-time highs. Recent momentum has been fueled in part by Musk’s $1 billion open-market purchase of Tesla stock, as well as traders positioning ahead of the Q3 delivery beat — which indeed materialized.

TSLA data by YCharts

For these reasons, I would be cautious about chasing Tesla at current levels. While projects like Optimus, the robotaxi network, and potential xAI synergies are exciting, none have yet generated material revenue or profit. Each remains highly speculative at this stage.

For now, investors may be better served monitoring Tesla’s execution on the AI front and considering entry points on pullbacks rather than buying into the stock at peak optimism.

WASHINGTON — There’s bipartisan support in Congress for extending tax credits that have made health insurance more affordable for millions of people since the COVID-19 pandemic. But the credits are in danger of expiring as Republicans and Democrats clash over how to do it.

Democrats are threatening to vote to shut down the government at the end of the month if Republicans don’t extend the subsidies, which were put in place in 2021 and extended a year later when Democrats controlled Congress and the White House. The tax credits, which are due to expire at the end of the year, go to low- and middle-income people who purchase health insurance through the Affordable Care Act.

Some Republicans who have opposed the healthcare law, known as Obamacare, since it was enacted in 2010 are suddenly open to keeping the tax credits. They acknowledge that many of their constituents could see steep hikes in coverage if the subsidies are allowed to lapse.

But the two sides are far apart. Republicans are divided, with many firmly opposed. GOP leaders in the House and Senate have been open but noncommittal on the extension, and many of those Republicans who say they support it argue that the tax credits should be reworked — potentially opening up a new healthcare debate that could take months to resolve.

Democrats would be unlikely to agree to any changes in the subsidies, increasing the chances of a standoff and mounting uncertainty for health insurers, hospitals, state governments and the people who receive them.

“In just a few weeks, unless Congress acts, millions of Americans will start getting letters in the mail telling them their health insurance costs are about to go through the roof — hundreds of dollars, thousands in some cases,” Senate Democratic leader Chuck Schumer (D-N.Y.) said last week.

Surging enrollment

Enrollment in Affordable Care Act plans has surged to a record 24 million people in large part due to the billions of dollars in subsidies that have lowered costs for many people. The expanded subsidies allowed some lower-income enrollees to access health plans with no premiums and capped the amount higher earners pay for premiums to 8.5% of their income. It also expanded eligibility for middle-class earners.

With expiration just a few months away, some of those people have already gotten notices that their monthly premiums are poised to surge next year. Insurers have sent out notices in nearly every state, with some proposing premium increases of as much as 50%.

Lawmakers are facing pressure to act from some of the country’s biggest industries, including the insurers that cover people on the marketplace and hospital executives who say they’re already going to be squeezed by the Medicaid cuts in President Trump’s massive spending and tax bill enacted this summer.

“There’s broad awareness that there’s a real spike in premiums coming right around the corner, both Republicans and Democrats,” said David Merritt, senior vice president of external affairs at Blue Cross Blue Shield. “It’s certainly lining up for Congress to have an opportunity to head off this problem.”

Companies have said they’ll need to raise premiums without the subsidies because healthier and younger people are more likely to opt out of coverage when it gets more expensive, leaving insurers to cover older and sicker patients.

In Iowa last month, the state’s insurance commissioner weighed increases ranging from 3% to 37% against a stream of angry public comments. One woman who runs a garden center in Cedar Falls said she was considering dropping her health insurance.

“I am already living as frugally as I possibly can while working as hard as I possibly can, putting in as many hours as I am allowed to at my job, never missing a day of work,” the woman, LuAnn, wrote in a public comment published to the commissioner’s website.

Feud over Obamacare

On Capitol Hill, the issue has become entangled in a larger fight over government funding as the threat of a shutdown looms at the end of the month. Schumer and House Minority Leader Hakeem Jeffries (D-N.Y.) have said Democrats will not vote to keep the government open unless an extension of the healthcare tax credits is part of the deal. Republicans have said that they want more time to look at the subsidies and potentially scale them back. They will also have to wait for a signal from Trump, who has not yet weighed in.

Jeffries said last week that “we will not support a partisan Republican spending bill that continues to rip away healthcare from the American people.”

Republican leaders are eyeing a potential stopgap bill that would keep the government open for a few weeks, but they are unlikely, for now, to include the extension. GOP leaders in both the House and Senate are also under pressure from some members who worry that premium increases will be a political liability before next year’s midterm elections.

Senate Majority Leader John Thune (R-S.D.) has said he wants to see a proposal from Democrats on how to extend the subsidies since they are pushing the issue. “Maybe there is something we can do in the middle as a solution,” he said in a Punchbowl News interview Thursday, adding that his members are divided on the issue.

Still, Thune has ruled out quick action, even as he noted that premium notices will go out soon. He has said a short-term spending measure to fund the government for several weeks while Congress finishes its budget bills is not likely to include an extension of the benefits,

House Speaker Mike Johnson (R-La.) has said that many of his members would oppose an extension, but he has not ruled it out.

In recent days, 15 House Republicans in competitive political districts introduced legislation to extend the tax credits for one year. “While the enhanced premium tax credit created during the pandemic was meant to be temporary, we should not let it expire without a plan in place,” said Rep. Jen Kiggans (R-Va.), who led the effort with Rep. Tom Suozzi (D-N.Y.).

Middle-class and small-business owners, including many in Kiggans’ coastal Virginia district, will be especially vulnerable to big health insurance hikes if the subsidies are not extended.

Several Senate Republicans also said they’d favor an extension. Sen. Josh Hawley of Missouri said that if Congress doesn’t act, some premiums will “skyrocket, and not by a little bit. We’re looking at massive increases. People will not be able to afford it.”

Sen. John Cornyn (R-Texas) said he thinks Congress should scale back the subsidies for the highest-income people who receive them. “I think we all know that access to healthcare is important and we take it very seriously,” he said.

Senate Finance Committee Chairman Mike Crapo (R-Idaho), whose panel has jurisdiction over the tax credits, said he’s working with his colleagues to find a solution. “There are a lot of ideas being thrown out there,” he said. “I’m trying to find a solution; I’m not telling you what the solution is.”

Others were firmly against it. “It’s costing us billions of dollars,” Sen. Ron Johnson (R-Wis.) said.

Open enrollment begins Nov. 1, and people will begin to see “real sticker shock” as Affordable Care Act plan prices are posted next month, Sen. Tammy Baldwin (D-Wis.) said.

“Timing is important,” she said.

Jalonick and Seitz write for the Associated Press. AP writers Lisa Mascaro in Washington and Hannah Fingerhut in Des Moines contributed to this report.

People thinking about starting a business or retiring early — before they’re old enough for Medicare — may want to wait until November, when they can see just how much their Affordable Care Act health insurance will cost next year. Sharp increases are expected.

Premiums for ACA health plans, also known as Obamacare, on which many early retirees and small-business owners rely for coverage, are going up, partly because of policy changes advanced by the Trump administration and Congress. At the same time, more generous tax subsidies that have helped most policyholders pay for coverage are set to expire at the end of December.

After that, subsidies would return to what they were before the COVID-19 pandemic. Also being reinstated would be an income cap barring people who earn more than four times the federal poverty level from getting any tax credits to help them purchase coverage. Although Congress potentially could act to extend the credits, people weighing optional life changes should factor in the potential cost if lawmakers fail to do so.

“I would hate for people to make a big decision now and then, in a few months, realize, ‘I’m not even going to qualify for a tax credit next year,’” said Lauren Jenkins, an insurance agent whose brokerage helps people sign up for coverage in Oklahoma. “Coupled with the rate increases, that could be significant, especially for someone at or near retirement, when it could easily cost over $1,000 a month.”

Still, how things play out in the real world will vary.

The key factor is income, as the subsidy amount people receive is primarily based on household income and local insurance costs.

People experiencing the biggest dollar increase in out-of-pocket premiums next year will be those who lose subsidies altogether because they earn more than 400% of the federal poverty level. This year, that’s $62,600 for a single person and $84,600 for a couple.

This “subsidy cliff” was removed in the legislation first enacted during the COVID-19 pandemic to create enhanced subsidies, but it will be back next year if they expire. About 1.6 million people who earn more than 400% of the poverty threshold bought ACA plans this year, many of them getting some tax credits to help with the premiums, according to KFF data. KFF is a health information nonprofit that includes KFF Health News.

“A lot of small-biz owners fall around that level of income,” said David Chase, vice president of policy and advocacy for the Small Business Majority, a Washington, D.C.-based advocacy group, which is urging Congress to extend the credits.

And a good chunk of ACA enrollment consists of small-business owners or their employees because, unlike larger firms, most small businesses don’t offer group health plans.

In the Washington metropolitan area, “7 out of 10 people who qualify for lower premiums [because of the tax credits] are small-business owners,” said Mila Kofman, executive director of the DC Health Benefit Exchange Authority.

Congress must decide by the end of December whether to extend the subsidies a second time. Permanently doing so could cost taxpayers $335 billion over the next decade, but not acting could cause financial pain for policyholders and pose political repercussions for lawmakers.

Because new premiums and smaller subsidies would take effect in January, the potential fallout has some Republican lawmakers worried about the midterm elections, according to news reports.

Republican pollsters Tony Fabrizio and Bob Ward warned the GOP in a memo that extending the enhanced credits could mean the difference between success and failure in some midterm races, because support for the premium help “comes from more than two-thirds of Trump voters and three-quarters of Swing voters.”

Although supporters credit the enhanced subsidies for a record 24 million sign-ups for this year’s ACA plans, critics have blamed them for instances in which brokers or consumers engaged in improper enrollment.

“The expanded subsidies were a temporary COVID pandemic policy enacted by congressional Democrats on a party-line vote and scheduled to end after 2025,” said Brian Blase, president of the Paragon Health Institute, a conservative think tank. “They have led to tremendous fraud and waste, they reduce employer coverage, and they should be permitted to expire.”

Ed Haislmaier, a senior research fellow at the conservative Heritage Foundation, acknowledged that people earning more than 400% of the poverty level would not be happy with losing access to subsidies, but he expects most to stay enrolled because they want to avoid huge medical bills that could threaten their businesses or savings.

“They are middle-class or upper-income people who are self-employed, or early retirees with significant income, which means they have a lot of assets behind that income,” he said. “These are people who view insurance as financial protection.”

He thinks lawmakers would win political support from voters in this category by addressing two of their other major ACA concerns: that annual deductibles are too high and insurers’ networks of doctors and hospitals are too small.

“If you just give these people money by extending subsidies, it’s only addressing one of their problems, and it’s the one they are least upset about,” Haislmaier said. “That is the political dynamics of this.”

Here’s how the expiration of subsidies could play out for some hypothetical consumers.

People in households earning less than four times the poverty rate would still get subsidies — just not as generous as the current ones.

For example, those whose earnings are at the lower end of the income scale — say, just over 150% of the poverty threshold, or about $23,000 — will go from paying a national average of about $2 a month, or $24 toward coverage for the year, to $72 a month, or $864 a year, according to a KFF online calculator.

On the other end of the income spectrum, a 55-year-old Portland, Ore., couple with a household income of $85,000 would take a big hit on the cost of their benchmark plan. They currently pay about $600 a month in premiums — about 8.5% of their household income — with subsidies kicking in about $1,000 to cover the remainder.

Next year, if the tax credits expire, the same couple would not get any federal help because they earn over four times the poverty limit. They would pay the full monthly premium, with no subsidies, which would be about $1,800, based on initial 2026 premium rates filed with state regulators, said Jared Ortaliza, a policy analyst at KFF.

People should begin to see insurance rates late this fall, and certainly by Nov. 1, when the ACA’s open enrollment season begins, said Jenkins, the Oklahoma insurance agent. That gives them time to mull over whether they want to make changes in their plan — or in their lives, such as quitting a job that has health insurance or retiring early. This year, open enrollment extends to Jan. 15. Under new legislation, that open period will shorten by about a month, starting with the 2027 sign-up period.

Those who do enroll for 2026, especially the self-employed and people retiring early, should closely track their incomes during the year, she said.

It would be easy to bust through that income cap, she said.

If they do, they’ll have to pay back any tax credits they initially qualified for. Their income might rise unexpectedly during the year, for example, pushing them over the limit. An income bump could come from drawing down more money from retirement accounts than planned, landing a new customer account, or even from winning big at a casino.

“Maybe they win $5,000 at the casino, but that puts them $500 over the limit for the year,” Jenkins said. “They might have to pay back $12,000 in tax credits for winning a few thousand at the casino.”

Appleby writes for KFF Health News, a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF, an independent source for health policy research, polling and journalism.

The federal government has paid California dairy farms more than $230 million to subsidize losses in milk production resulting from bird flu, records show, an amount that the dairy industry expects to climb higher as more claims for damages are processed.

The H5N1 bird flu has swept through more than 75% of California’s 1,000 dairy farms since August 2024, sickening cattle and leading to steep dropoffs in milk production.

Farmers were able to get relief under a U.S. Department of Agriculture program known as the Emergency Assistance for Livestock, Honeybees and Farm-Raised Fish Program, or ELAP. The program usually provides assistance for farmers impacted by wildfires, drought and flooding but was opened up for dairy farmers last year as bird flu began ravaging their cows.

U.S. Department of Agriculture records show that 644 payments were made to 359 California dairy farms between November 2024 and June 2025 totaling $231 million. The average per farm payment was about $645,000, and ranged from $2,058 to the Pereira Dairy Farm, in Visalia, to $4.4 million to Channel Islands Dairy Farm, in Corcoran.

Those payments are expected to go much higher, however, as more claims are submitted and processed. Many of the payments issued in May and June were for outbreaks in 2024, suggesting there are more to come.

The relief payments were obtained through a Freedom of Information Act request by Farm Forward, a nonprofit group that advocates against factory farming. The group asserts that the subsidies help prop up industrial-scale dairy operations that perpetuate the spread of bird flu.

“These are mega industrial operations that are fueling an outbreak,” said Andrew deCoriolis, Farm Forward’s executive director. “Bird flu spreads in exactly the kinds of environments that we’re paying to preserve.”

Anja Raudabaugh, the chief executive of the industry’s largest state trade group, Western United Dairies, said the payments have “ensured our dairy communities and their workers stay employed and healthy. Until we get approval of a dairy cow vaccine, weathering this storm has only been possible with the assistance of the milk loss payments.”

Jonathan Cockroft, managing partner of Channel Islands Dairy Farms, said while the payments helped with the roughly 30% drop in milk production his farm experienced, his losses exceed the $4 million he received.

He said the virus caused cows to abort their pregnancies, and often prevented them from getting pregnant again. A dairy cow that doesn’t give birth doesn’t produce milk. In other cases, he said the udders were so scarred by the disease that the cows were unable to produce milk at levels prior to infection.

“There’s a whole other version I’m not sure the public understands, which is the huge impact on reproduction,” he said.

He also noted many animals died — especially when the outbreak first hit last fall, and the newness of it combined with the blazing heat of the Central Valley felled 10% to 15% of many California herds.

Joey Airoso, a dairy farmer in Tipton, received a $1.45-million subsidy for an outbreak at his farm last October.

He said the outbreak has cost him more than $2 million “just on milk income and that does not include the over $250,000 of extra care costs” required to treat cows with medicines, extra staffing and veterinary consultations.

And it doesn’t cover the cost of the cows that died — which can’t produce milk or be sold for meat. The average dairy cow costs about $3,500, Cockroft said.

Jay Van Rein, a spokesperson for California’s Department of Food and Agriculture, said the loss payments are “the most realistic way for producers to recover and to avoid huge disruptions in the food supply of these products.”

USDA officials didn’t immediately respond to a request for comment, but a former top USDA official who left the agency in January said it was important to provide dairy farmers relief once the agency identified H5N1 bird flu in a handful of Texas herds in March 2024. By then the disease had been spreading for weeks, if not months, making containment to one state impossible.

“This was a once-in-a-lifetime event, and we knew that we were going to need to support producers, and we knew that the quicker we could get some assistance out to them to help them test, the better off we were going to be, and the faster we’d be able to bring the infection under control,” he said.

Farm Forward’s DeCoriolis and others, however, say these programs perpetuate an agricultural industry designed around containing hundreds, if not thousands, of genetically similar animals into confined lots — veritable playgrounds for a novel virus. He also noted the federal relief programs don’t come with any strings attached, such as incentives for disease mitigation and/or biosecurity.

Angela Rasmussen, a virologist at the University of Saskatchewan’s Vaccine and Infectious Disease Organization in Canada, said handing out subsidies to farms without trying to understand or investigate the practices they are using to quash the disease is a mistake.

“What are they doing on the farms to prevent reinfection?” she said.

The USDA payments were based on a per cow milk production losses over a four-week period. According to Farm Forward’s data, several farms received more than one subsidy. While roughly half received just one payment, 100 farms received two payments, 58 received three, 19 received four and two received six separate payments.

At one farm in Tulare County, four USDA payments were submitted once a month between November 2024 and February 2025. At another, payments stretched from December 2024 to May 2025.

Rasmussen said the multiple payments most likely stemmed depending on specific circumstances at the dairies involved.

Cockroft of the Channel Islands Dairy said he and other farmers have seen waves of reinfection and milk tests that remain positive for months on end. He said he knew of a farm that was in quarantine for nine months.

When herds are quarantined, animals are not allowed to be transferred on or off site. In California, a farm is under quarantine for 60 days after initial virus detection. It can’t move out of quarantine until tests show its milk is virus-free — for three weeks in a row.

Van Rein, the state agriculture spokesperson, said the average time under quarantine is 103 days. He said that of the 1,000 herds in California, 940 are not under quarantine; 715 of those had previously been infected and released from quarantine.

A quarantined farm can still sell milk, however, even if the milk tests positive. Pasteurization has been shown to kill the virus.

The relief payments are another sign of how the U.S. government supports the agricultural industry, which is considered by some to be vital to the national interest.

“We’ve decided politically that this is an industry that we want to support, that was hit by something that obviously wasn’t their fault, and we’re going to help them, because it was a disastrous thing that hit the industry,” said Daniel Sumner, an agricultural economist at UC Davis. “If we thought about these payments as we’re using our tax money to help somebody who’s in need, because their family is poor, that’s not the case.”

The failure of one of Skid Row’s largest homeless housing providers represents a dire warning for the viability of supportive housing in Los Angeles, according to a new report on the organization’s demise.

Released Wednesday, Redesign Required: Lessons for Permanent Supportive Housing from Skid Row Housing Trust Buildings, concludes that low and inconsistent rental subsidies and other structural problems in L.A.’s homeless housing systems played a key role in the trust’s 2023 collapse.

Without major changes, other supportive housing providers remain at risk, imperiling housing for thousands of the region’s most vulnerable residents and exposing taxpayers to further bailouts, said Claire Knowlton, a Los Angeles-based financial consultant for nonprofits and the report’s lead author.

“This is a wake-up call,” Knowlton said. “It’s time to dig in and figure out a vision for this sector moving forward.”

Once considered a national leader in homeless housing, the trust announced in early 2023 it could no longer manage its 2,000 units across 29 properties, many of which were renovated, century-old single-room occupancy hotels in and around Skid Row. The decision came after years of financial trouble with buildings in disrepair and disarray, replete with squatters, crime, nonfunctional elevators and clogged and broken toilets.

City of Los Angeles leaders pushed the trust into receivership and, after 18 months, all the properties were transferred to new owners. The city allocated nearly $40 million to finance the receivership, though the new owners reimbursed some of the money upon taking control. The trust declared bankruptcy and dissolved in January.

Researchers received access to the trust’s internal financial data and interviewed more than 30 people, including former trust executives and those knowledgeable about its operations, to produce the report.

The report, which was funded by the Conrad N. Hilton Foundation, is not meant to be a definitive understanding of the trust’s failure, Knowlton said. Times reporting has shown questionable decision-making, financial mismanagement and unstable leadership marked the organization’s final few years. The report did not examine specific actions made by trust executives. Joanne Cordero, the trust’s final CEO who took over amid its spiral in late 2022, was a co-author.

The root of the trust’s problems, the report determined, was that tenants’ public rental subsidies did not provide enough revenue to manage the buildings, including costs needed to assist those dealing with mental illness and drug addiction. All trust properties, including newer buildings with studio and one-bedroom apartments, were running annual deficits — nearly $1 million in one case — once factoring in long-term maintenance expenses, the report found.

Not only were the rental subsidies insufficient to cover costs, but also the funding came through multiple programs that paid the trust wildly disparate rates for rooms without any clear way to increase them. Similar trust buildings received subsidies priced at a difference of up to $600 per unit per month.

The report called the calculation of these rates “cryptic” and their variability “indefensible.”

“The subsidies are not covering the cost,” Knowlton said. “The increases are inconsistent. The subsidy types are inconsistent, and there’s no reason.”

The report cites 2015 as a turning point for trust properties. That year, the region implemented a new coordinated entry system for placing homeless residents into trust buildings and other supportive housing through a process designed to prioritize rooms for the neediest.

The system has been criticized broadly among homeless housing providers for taking too long to match potential residents with units and for concentrating too many people with mental illness, physical disabilities and addiction problems within buildings.

After its implementation, vacancies in trust buildings skyrocketed, which further sapped the organization’s revenues. Spending on security immediately jumped from $50,000 annually prior to 2016 to well over $500,000 after, and ultimately soaring above $1.4 million by 2022.

Knowlton said she could not determine that the coordinated entry system was the source of these problems as other factors played a role. The portfolio’s vacancies were stabilizing until staffing and maintenance woes amid the COVID-19 pandemic in 2020 sent them spiraling. Deteriorating conditions in Skid Row broadly over the same period also could explain the greater security needs, she said.

Still, Knowlton said that local leaders should reevaluate decisions to house those with the most severe health problems in single-room occupancy hotels, which have shared kitchen and bathroom facilities.

“I don’t think single-room occupancy is the right type of housing for people with high levels of mental health needs or extreme substance use issues,” she said.

Reaching similar conclusions during the receivership, city housing officials advocated for tearing down trust SROs and replacing them with new efficiency and one-bedroom apartment buildings, but they abandoned that plan as too risky, expensive and disruptive.

Knowlton is pushing to overhaul the region’s system for funding supportive housing, noting that the problems she identified were universal.

Rent subsidies, Knowlton said, should be set to the cost of providing supportive housing, including social services. Doing so, however, would require significant and ongoing funding boosts at the federal level, which she deemed “extremely ambitious.” In the short term, she argued government agencies should increase and standardize the subsidies to reduce their variability.

“That’s going to give us the time and the cushion that we need to really set that longer term vision around how these buildings are stewarded as public assets, as community assets, because that’s what they are,” she said.

The alternative could be worse, she said. Other supportive housing providers have shown signs of stress. SRO Housing Corp., a similar nonprofit landlord operating 30 supportive housing buildings with a large presence in Skid Row, has documented its financial challenges for years. In December, tenants at one building alleged vermin infestations, broken elevators and sewage leaks in a lawsuit.

When the trust failed, the city stepped in to save critical last-resort housing, but at great cost to taxpayers and without resolving underlying problems in the supportive housing system, Knowlton said. Federal, state and local leaders should do everything they can to avoid a similar situation from occurring again, she said.

The trust’s collapse, Knowlton said, was, “a canary in the coal mine situation.”

Times staff writer Douglas Smith contributed to this report.