With the federal government shutdown, Democrats remain adamant they won’t agree to any short-term funding resolution unless it includes an extension of enhanced Affordable Care Act premium tax credits. The subsidies, set to expire at the end of 2025, help keep insurance affordable for millions of Americans — and Democrats argue that protecting them is essential before they agree to keep the government open.
At the heart of the standoff are the ACA premium tax credits, first introduced during the Covid-19 pandemic. The subsidies increased financial assistance for those already eligible and expanded eligibility to middle-income households earning above 400% of federal poverty guidelines.
ACA enrollment has doubled from 11 million to more than 24 million since the enhanced credits took effect, with the vast majority of recipients being American citizens.
Before the passage of President Donald Trump’s “One Big Beautiful” tax bill earlier this year, some legally present immigrants were also eligible for the credits. Democrats want those options restored, particularly for individuals with temporary protected status, asylum seekers, and other lawfully present immigrants.
“They want to have illegal aliens come into our country and get massive healthcare at the cost to everybody else, and we don’t have it,” Trump told reporters on Tuesday. House Speaker Mike Johnson, R-La., echoed Trump’s claim, telling CNBC, “They want to restore taxpayer-funded benefits … to illegal aliens. We’re not doing that.”
Democrats say they are only trying to restore health care coverage options that were available to immigrants having “lawful presence” in the United States before those options were eliminated by President Donald Trump’s so-called “One Big Beautiful” tax bill this year.
“Federal law prohibits the use of taxpayer dollars to provide medical coverage to undocumented individuals,” House Minority Leader Hakeem Jeffries, D-N.Y., said in a CNBC interview. “That’s the law, and there is nothing in anything that we have proposed that is trying to change that law.”
Rep. Adriano Espaillat, D-N.Y., added that restoring coverage for lawfully present immigrants is a matter of fairness and health equity, not an expansion to undocumented residents.
Republicans, however, argue Democrats are using the shutdown fight to push a costly expansion of benefits. President Trump told reporters Tuesday, “They want to have illegal aliens come into our country and get massive healthcare at the cost to everybody else, and we don’t have it. That’s the number one reason they want to strike.”
Republicans also highlight the cost of extending the subsidies overall. “It’ll cost hundreds of billions of dollars. Can’t afford it,” Rep. Andy Harris, R-Md., said in July. “That was a Covid-era policy. Newsflash to America: Covid is over.”
The nonpartisan Congressional Budget Office estimates that extending the subsidies for another decade would cost roughly $350 billion.
Democrats counter that Republicans are using immigration rhetoric as a smokescreen to avoid admitting that millions of Americans could soon face higher premiums if subsidies lapse. They say extending coverage now is the only way to protect families before funding negotiations move forward.