The federal government shutdown continues. And at the core of the stalemate between Republicans and Democrats over funding government services into October and beyond is a dispute over health care.

The U.S. House of Representatives passed a continuing resolution backed by President Donald Trump to keep the government funded at current levels until late November, but the Senate rejected it multiple times, with most Republicans voting in favor and most Democrats against.

Democrats want Republicans to reverse cuts and changes to Medicaid made under the federal reconciliation bill known as the One Big Beautiful Bill, and to extend Affordable Care Act subsidies to prevent premium increases for millions next year.

If no action is taken to extend those subsidies, costs for some insurance is expected to rise — not as part of this shutdown, but starting Jan. 1.

So why is that? Here’s a closer look.

What is the marketplace?

The Health Insurance Marketplace is where people without another form of insurance can buy coverage. About 24 million people are currently enrolled nationwide.

In North Carolina, that number is almost 1 million.

Plans sold on the marketplace are offered by private insurance companies but must meet federal standards.

The marketplace was created under the Affordable Care Act passed in 2010 under the Obama administration — also known as Obamacare — and premiums there often rise each year.

Most enrollees, however, don’t pay the full price — they receive subsidies that reduce their monthly costs.

Open enrollment for next year begins on Nov. 1.

What are subsidies

Subsidies make health insurance more affordable. Two types of aid are available:

Premium tax credits, which reduce monthly premiums.
Cost-sharing reductions, which lower deductibles and other out-of-pocket expenses.

Louise Norris, a health policy analyst for HealthInsurance.org, said those subsidies are designed to keep pace with premium growth. In 2021, to address the COVID-19 pandemic, Congress approved temporary enhancements to “make them bigger and available to more people,” she said.

Before 2021, households earning over 400% of the federal poverty level — about $63,000 for an individual or $128,000 for a family of four — weren’t eligible for premium tax credits. The pandemic-era changes removed that income cap and lowered how much families must pay toward premiums.

Previously, people below 400% of the poverty level paid between 2% and 9.5% of their income for coverage, Norris said. The 2021 changes created a new sliding scale ranging from 0% to 8.5%.

Why premiums could rise

“The problem is, that was just a temporary improvement to the subsidy structure,” Norris said.

The enhanced subsidies were first approved for two years, then extended through the end of 2025 under the 2022 reconciliation act, the Inflation Reduction Act backed by then-President Joe Biden. If Congress doesn’t act again, the enhancements will expire at the end of this year — meaning that in January 2026, the rules revert to how they were before 2021.

“The result of that is going to be significantly higher premiums for people in the marketplace in 2026 and some folks losing their subsidies altogether,” Norris said. Some people “will drop their coverage altogether because it’s no longer affordable,” she added.

Insurers have requested the largest rate increases since 2018 for next year. “All of that is combining together to make it to where there could be some real sticker shock when people get their notifications from the marketplace,” Norris said.

For 2026, some insurers in North Carolina have proposed steep premium hikes for marketplace plans — including nearly 40% by AmeriHealth Caritas, 29.4% at Blue Cross Blue Shield of North Carolina, and 27.5% at Cigna, according to the Peterson-KFF Health System Tracker.

North Carolina Insurance Commissioner Mike Causey said in a news release in July that NCDOI “is carefully reviewing the requested rates to ensure that they are supported and meet all statutory requirements.”

A department spokesman told The N&O finalized rates will be posted on Oct. 29.

How many people could lose coverage

The nonpartisan Congressional Budget Office estimates that, compared with coverage levels before Trump-backed One Big Beautiful Bill took effect, the law will leave 10 million more people uninsured by 2034 — including 7.5 million fewer with Medicaid coverage and 2.1 million fewer with marketplace plans.

When those effects are combined with the scheduled expiration of the ACA’s enhanced premium tax credits, the number of uninsured people is projected to increase by more than 14 million in 2034, KFF reported.

The CBO also projects that permanently expanding the premium tax credit structure would increase the federal deficit by $350 billion between 2026 and 2035 and boost the number of people with health insurance by 3.8 million in 2035.

How much could premiums rise

Without an extension, people earning more than 400% of the poverty level would no longer qualify for subsidies and would face the full cost of coverage — sometimes several hundred dollars per month for one person.

KFF projects an average premium increase of about 114% if the enhanced subsidies expire, though the exact impact would vary depending on a person’s age, income and location.

Nationwide, 93% of ACA marketplace enrollees received premium tax credits in 2025, with even higher rates in states won by Trump in 2024, KFF reported.

Which immigrants are eligible for government help with health coverage?

Trump and other Republicans have accused Democrats of shutting down the government because they want to give free health care to immigrants in the country without legal authorization.

Except in emergency situations, such immigrants are not eligible for federally funded health coverage, though some states — not including North Carolina — have chosen to expand coverage regardless of immigration status.

Republicans’ claim is tied largely to provisions in a Democratic proposal that repeals provisions in the reconciliation bill that further restricted eligibility for federal health care programs — such as Medicaid, Medicare and subsidized Affordable Care Act marketplace coverage — for lawfully present immigrants. Only a few categories of those immigrants will still qualify for marketplace subsidies under Republicans’ reconciliation bill, such as green card holders and certain Cubans and Haitians.

Additionally, marketplace coverage generally applies to people earning at least 100% of the federal poverty level, since those with lower incomes usually qualify for Medicaid. But some lawfully present immigrants — including most green card holders in the five-year waiting period for Medicaid — don’t qualify, so they were allowed to buy marketplace plans with subsidies instead. The reconciliation bill eliminated that option.

Republicans have also pointed to “emergency Medicaid” as a way people without authorization to be in the country can access care. Hospitals are required to treat anyone who comes to the emergency room, regardless of insurance status. Emergency Medicaid allows people without legal status to receive limited coverage if their life is at risk, but it represents less than 0.5% of federal health care spending, The News & Observer previously reported. The reconciliation bill reduced how much the federal government reimburses states for emergency care provided to these immigrants in states that expanded Medicaid, KFF reported.

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