The health care debate behind the government shutdown

Summary

Post Reports – The Health Care Debate Behind the Government Shutdown

Date: October 1, 2025
Host: Elahe Izadi
Guest: Paige Winfield Cunningham (National Health Reporter, The Washington Post)

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Overview

This episode of Post Reports delves into the policy disputes at the heart of the October 2025 government shutdown, focusing particularly on debates over Affordable Care Act (ACA) subsidies and Medicaid funding. Elahe Izadi interviews national health reporter Paige Winfield Cunningham to explain what’s at stake, break down partisan positions, and explore the broader implications for health insurance affordability across the U.S.

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Key Discussion Points & Insights

1. Root Cause of the Shutdown: Health Care Funding Stalemate

• The immediate cause: Congress failed to reach a deal to extend funding, leading to a shutdown affecting multiple federal agencies.
• The heart of the dispute: Disagreement over whether to make pandemic-era ACA subsidies permanent and restore recently cut Medicaid funding.
  • Quote: “The shutdown has had immediate impacts... But today we want to focus our attention on the policy debate at the heart of the shutdown. And it's about health care.” (Elahe Izadi, 00:52)

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2. Democrats’ Objectives

• ACA Subsidies:
  • Democrats want to make enhanced, pandemic-era subsidies for ACA (Obamacare) plans permanent.
  • These subsidies have greatly reduced premiums and expanded coverage to more Americans.
  • Quote: “They’re refusing to vote on a government funding bill unless Republicans extend those subsidies.” (Paige Winfield Cunningham, 02:08)
• Medicaid Funding:
  • Democrats seek to restore $1 trillion in Medicaid cuts from the summer’s “one big beautiful bill.”
  • Cuts introduce stricter enrollment checks and work requirements, likely reducing future Medicaid rolls by 7.5 million over 10 years.
  • Quote: “Basically, the changes to Medicaid don't change the benefits themselves...7.5 million fewer people will be enrolled in Medicaid 10 years from now.” (Paige, 02:55 & 03:25)

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3. Republican Position and Reasoning

• GOP’s main 2025 legislative achievement was the $1 trillion Medicaid cut and stricter verification and work requirements.
  • These are framed as “restoring integrity” and combating fraud.
  • Quote: “For Republicans, this was their big legislative accomplishment this year. It's what President Trump wanted.” (Paige, 04:37)
• On ACA subsidies, Republicans remain opposed to expansions, citing both ideological objections to strengthening Obamacare and the increased federal cost.
  • Quote: “For Republicans who have long been opposed to the Affordable Care Act, building on that law is the last thing they want to do.” (Paige, 10:19)

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4. What Are ACA Subsidies and Why Do They Matter?

• Explanation: Subsidies are federal payments that help individuals purchase private insurance on healthcare.gov, based on income.
• Pandemic-Era Enhancements: Expanded subsidies capped premiums at 8.5% of income and allowed some middle-class families to qualify.
  • Enrollment doubled—from 11 million to 24 million, with around half able to get a plan with no monthly premium.
  • Quote: “Those are really steep costs for a family that, yes, they're not poor, but they're not, you know, wealthy by any measure...Now, under these expanded premiums, those people can be eligible and are eligible for subsidies.” (Paige, 07:09)

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5. Potential Consequences If Subsidies Expire

• Up to four million fewer people could retain insurance in ten years, largely in higher-income brackets.
• Premiums are already increasing as insurers anticipate a lapse in subsidies for 2026.
  • Quote: "Premiums are going up. Insurers have assumed those extra subsidies aren’t going to continue. And so when people go and look at those costs, they're going to be a lot higher..." (Paige, 10:02)
• A likely rise in the uninsured rate after historic lows.

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6. Medicaid Cuts: Technical Stricter Rules & Work Requirements

• More frequent eligibility checks (twice annually).
• Work or volunteer requirements for some higher-income recipients (80 hours/month).
  • Quote: "...they have to work or volunteer for 80 hours a month. And if they don't show...they can be dropped from coverage." (Paige, 04:07)

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7. Republicans’ Cost Argument

• The expanded ACA subsidies raised federal spending from $60 billion/year to $90 billion/year—a 50% increase.
  • However, still a relatively small slice of federal health spending.
  • Quote: “The government was spending about 60 billion a year...that’s up to about 90 billion a year...The subsidies are really a piece of the pie.” (Paige, 12:59)

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8. The Role of President Donald Trump

• Trump has accused Democrats of trying to fund healthcare for undocumented immigrants—a claim refuted by Paige and current law.
  • Quote: “Democrats, while they're drawing a line in the sand on health care, it's not over coverage for undocumented immigrants. Undocumented immigrants are specifically banned from the marketplaces.” (Paige, 13:44)

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9. Outlook & The Limits of Reform

• Potential for post-shutdown compromise: Some Republican leaders may consider a partial subsidy extension, especially with looming midterms and expected premium hikes.
• Deep partisan divides make substantial or structural reforms nearly impossible.
  • Attempts to make bigger changes to health insurance are unlikely.
  • Quote: "...you know, it's really hard to see going forward how we get any more substantial changes to the health insurance landscape because of how partisan the issue has been." (Paige, 16:11)

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10. Broader Trends in Health Insurance Costs

• Health insurance costs continue their long upward trend, driven by high pharmaceuticals and chronic disease—contrary to ACA's promise to “bend the cost curve.”
  • Quote: “It...turns out that didn’t happen. We still see health insurance costs going up, and there are a lot of reasons for that.” (Paige, 17:10)

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Notable Quotes & Memorable Moments

• On the Broken System:
  "One would never construct a health insurance system like the one we have in the United States if you were starting from scratch."
  (Paige, 15:52)

• On Insurance Market Dynamics:
  “When you have a scenario where health insurance is just too expensive. Who drops off? It's not the sicker people...It's the healthier people.”
  (Paige, 14:53)

• Historical Parallels:
  “There was a whole shutdown fight in 2013 when Senator Ted Cruz...filibustered over trying to defund the law...”
  (Paige, 10:55)

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Timestamps for Key Segments

• 00:52 — What shuts down, what stays open, focus on health care debate
• 02:03 — Origin of the fight: ACA subsidies & Medicaid cuts
• 03:49 — Details of Medicaid eligibility rules & work requirements
• 05:26 — How ACA subsidies work and their impact
• 08:53 — CBO estimates on future uninsured rate if subsidies expire
• 10:19 — Deeper Republican resistance to ACA expansion & past efforts to repeal
• 12:56 — Cost implications: expanded subsidies and GOP framing
• 13:37 — Trump’s public statements and the myth of coverage for undocumented immigrants
• 14:48 — Adverse selection: who drops insurance when costs rise
• 15:48 — Is a structural U.S. healthcare reform even possible?
• 17:08 — Premiums continue to rise despite ACA promises
• 17:50 — Show wrap-up

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Takeaway

The current government shutdown spotlights the enduring divide over health care funding and reform in the United States. Democrats are fighting to entrench pandemic-era ACA subsidies and undo sweeping Medicaid cuts, both measures that would keep millions more Americans insured and premiums lower. Republicans, however, remain united against further ACA expansions and consider recent Medicaid changes a signature accomplishment. With premiums rising and next year's elections looming, compromise is possible but unlikely to amount to major reform. Health insurance affordability may remain a persistent, unresolved issue—reflecting the intractable politics of the American healthcare system.

Transcript

[A]

At Constellation, we bring the energy powering America's growing economy every minute, every day. As the nation's largest producer of clean and reliable American made energy, Constellation is wherever you are. At 12:01am this morning, the federal government shut down. This happened after Democrats in Congress failed to reach a deal with Republicans to extend funding for federal agencies. The shutdown has had immediate impacts. Some national parks are closed. Agencies that handle things like small business loans, veteran job training and federal research are also closed. But some fundamental services will continue. Your mail will still get delivered. Social Security checks will still be issued. Our colleagues at the Washington Post are tracking all of the shutdown effects, including whether federal workers could lose their jobs. Just last week, President Donald Trump warned that he might fire employees during a shutdown. But today we want to focus our attention on the policy debate at the heart of the shutdown. And it's about health care. From the newsroom of the Washington Post, this is Post Reports. I'm Elahei izadi. It's Wednesday, October 1st. Today, National Health reporter Paige Winfield Cunningham joins me to talk through the ins and outs of this debate about health care subsidies and Medicaid funding. She'll talk about why the government shut down over that funding and what this fight could mean for your wallet. Hi, Paige. Thanks so much for joining me today.

[B]

Hi, Elijah. Great to be on.

[A]

So, Paige, as we said, the government shut down just after midnight. What is this fight about?

[B]

It's about the Affordable Care Act. We've seen. Oh, that is. Yes, we've seen many fights over the Affordable Care act ever since it was passed in 2010. And in this case, Democrats are wanting to build on the ACA by extending these extra subsidies that were originally provided on a temporary basis during the pandemic. They want to make those permanent. And so they're refusing to vote on a government funding bill unless Republicans extend those subsidies. And the proposal Democrats rejected yesterday would have funded the government through November 21.

[A]

Isn't there also an ask around Medicaid as well? Tell me, Paige, what is Medicaid and what did Democrats want there?

[B]

Yeah. So Medicaid is a program that's run by states and the federal government where people who are up to 133% of the federal poverty level are able to enroll in most states. Democrats want to restore Medicaid funding that was cut from the program in the one big beautiful bill that Republicans passed over the summer. And those cuts are about $1 trillion over the next 10 years. But I think there's a little bit of A misunderstanding around what they do. Basically, the changes to Medicaid don't change the benefits themselves. Rather, the Congressional Budget Office has estimated that 7.5 million fewer people will be enrolled in Medicaid 10 years from now, mostly because of stricter rules that Republicans put in place around enrollment, making it difficult for people to potentially qualify or stay on coverage.

[A]

And what are the Medicaid requirements they put in?

[B]

Republicans put in a lot of extra technical requirements that require states to do more frequent eligibility checks. So they'll need to check twice a year instead of just once. And under these rules, people could more easily be shut out of coverage until their eligibility can be fully verified. And there was also a work requirement put in place for kind of people at the upper end of income there, where basically they have to work or volunteer for 80 hours a month. And if they don't show the state Medicaid program they've been doing that, they can be dropped from coverage.

[A]

And what is the Republican argument against restoring that $1 trillion that they cut over the summer? Is it just, hey, we already made these cuts. We already had this argument. We're not rehashing this.

[B]

For Republicans, this was their big legislative accomplishment this year. It's what President Trump wanted. And Republicans really coalesced around this argument that they were restoring integrity to the Medicaid program. They claimed that there are a lot of people enrolled that shouldn't be, and by putting in these extra eligibility checks and work requirements, that they are shoring up the program for the people it was originally intended for.

[A]

Okay, so that is the fight over Medicaid funding. But now I really want to talk about healthcare subsidies, which seems to be the main thing that has triggered this, this shutdown crisis. And I think in order to talk about this, we need to unpack a few things, including what is a healthcare subsidy under Obamacare, also known as the Affordable Care Act?

[B]

So when people go to healthcare.gov to buy a private health insur, they can get a payment from the federal government to put toward that monthly premium. And the payment depends on their income. So people with lower incomes get more subsidies, people with higher incomes, less subsidies, and people with much higher incomes don't get any subsidies at all.

[A]

And so what are the subsidies at play in this current debate?

[B]

So if you rewind a couple of years ago to the pandemic, Congress was passing these big spending bills to provide more support to people. And in one of those bills, they decided to expand the subsidies to make it even more affordable for people to buy health coverage. So These subsidies were much more generous than they used to be, and that had the effect of attracting a lot more people to the marketplaces. So we saw enrollment skyrocket from around 11 million during the pandemic to now around 24 million people are enrolled in the marketplaces. And the vast majority of those people do get some sort of federal subsidy to put toward their premium.

[A]

Well, it sounds like before these extra subsidies, there was an issue with the healthcare law, that the intention was getting many more people on insurance, but a lot of people were still priced out. And so was the idea like, hey, let's provide this more money so that more people can afford these plans and we just have many more people insured?

[B]

Yeah, definitely. There had really been a systemic problem with the marketplaces for a long time, particularly for people that are earning in those higher income brackets. So, say 400% of the federal poverty level, that's $124,000 per year for a family of four. And a family like that, under the old subsidy structure, couldn't get any subsidy toward their premium. So they could be paying 9, 10% or more of their annual income toward insurance premiums. We're talking, you know, around $20,000, $22,000 a year, depending on where you live and depending on the plan that you buy. And so those are really steep costs for a family that, yes, they're not poor, but they're not, you know, wealthy by any measure. And that's going to be a huge damper on their monthly budget. And now, under these expanded premiums, those people can be eligible and are eligible for subsidies. And what those expanded subsidies did is it said people in those upper income levels cannot pay more than 8.5% of their income toward premiums. So the expanded subsidies have had a huge impact on those types of people. And then they've also had an impact on people at lower income levels. About half of the marketplace enrollees can get a plan without paying any monthly premium. And for people kind of in that mid level, they've seen relief of hundreds of dollars a month that they didn't have before.

[A]

So then why are Democrats mounting a fight over these subsidies now?

[B]

I think the way Democrats are looking at this is, you know, they've long wanted to build on the Affordable Care act, and Democrats saw an opportunity here because government funding, of course, ran out yesterday, and these subsidies do expire at the end of the year.

[A]

So then how many people could lose insurance or no longer purchase insurance if they don't have those subsid.

[B]

Well, the Congressional Budget Office has estimated that 10 years from now, 4 million fewer people will be in the marketplaces. The people that are going to be dropping off are going to be people most likely in these upper income brackets who decide that, you know, they, they're going to buy health insurance elsewhere or they might decide not to get health insurance at all because they don't want to pay tens of thousand dollars in premiums every year. So what we're going to see going forward is a continued significant number of Americans that don't have health insurance. Where we had seen historically low levels of uninsurance in recent years, that is probably going to tick back up. And then the other part of it is that healthcare.gov and the state run ACA marketplaces, they're going to open for enrollment on November 1st. In a couple of weeks, customers are going to be able to go online and look at the prices of plans. And those prices are high right now. Premiums are going up. Insurers have assumed those extra subsidies aren't going to continue. And so when people go and look at those costs, they're going to be a lot higher than they were in the last couple of years. Democrats are really trying to publicize that. They're trying to hold Republicans to the fire on that and say, hey, if they don't come to the table and negotiate with us, they're going to. These are the costs that consumers are going to see next year. For Republicans who have long been opposed to the Affordable Care act, building on that law is the last thing they want to do. Remember, they spent years after the law was passed trying to repeal it. In fact, there was a whole shutdown fight in 2013 when Senator Ted Cruz, a Republican from Texas, filibustered over trying to defund the law, which was unsuccessful. And so, you know, expanding Obamacare is, has long been a no go for Republicans. So it's not surprising that they're resisting this move by Democrats.

[A]

So given that history, is there any world in which Republicans would move at all on this issue in the future?

[B]

So it's a real division among Republicans. You know, you've got the hardliners who are never going to vote for any expansion of the aca. But the thing that Republicans have to consider is, you know, health care has traditionally been a really weak spot for them. They've been, you know, unable to repeal the Affordable Care act and have had sort of, you know, a shortage of, like, health policy ideas for quite some time. Republican leaders in both the House and the Senate have indicated they might be willing to talk about this with Democrats at the end of the year, I could definitely see a scenario where maybe they agree to some kind of partial extension of the subsidy, some kind of compromise here, especially if Republican leaders are feeling more pressure as they look ahead to the midterms next year and worry about consequences if premiums are going up as they're expected to and subsidies are gone. So there could be a conversation there. But I think first we're gonna have to see how this fight right now plays out.

[A]

After the break, what this could all mean for the future of health insurance affordability. We'll be right back. So, Paige, you mentioned already a bit about the Republican resistance to extending these subsidies. And one thing I wanted to ask is, is part of the argument here, oh, hey, this, this will just cost a lot of money.

[B]

Yeah. So Republicans are correct when they say this does cost a lot of money relative to what we were already spending on the subsidies. Basically, before the expanded subsidies, the government was spending about 60 billion a year on these. That's up to about 90 billion a year. So we're talking about a 50% increase. But I would note that, you know, when you're looking at total health care spending by the federal government, the subsidies are really piece of the pie. You know, the federal government spends hundreds of billions of dollars every year on Medicare and Medicaid.

[A]

And where does Trump sit in all this? Because we were talking a lot about congressional Republicans. What is the president saying about this?

[B]

Well, Trump has accused Democrats of wanting to give health care to undocumented immigrants. In a Truth Social post last week, he wrote, quote, the Democrats want illegal aliens, many of them violent criminals, to receive free health care. But Democrats, while they're drawing a line in the sand on health care, it's not over coverage for undocumented immigrants. Undocumented immigrants are specifically banned from the marketplaces, and federal Medicaid dollars also cannot go toward undocumented immigrants. There are some liberal states, including California and New York, who do use their own dollars to cover undocumented immigrants in Medicaid, but there weren't changes to that in the one big beautiful bill. So even if Republicans were to reverse those Medicaid cuts in the one big beautiful bill, that would largely not have an impact on undocumented immigrants.

[A]

Okay, Paige, so the politics aside, just going back to the health care subsidies, if they do expire, I wonder, what does that mean for the state of health insurance going forward?

[B]

You know, one of the problems here is that when you have a scenario where health insurance is just too Expensive. Who drops off? It's not the sicker people that need health insurance. Right? It's the healthier people. It's the younger people. And that's part of the reason that health insurers are proposing double digit premium increases, because what they're doing is they're sort of trying to calculate, like, who is going to drop off health insurance. It's probably going to be those healthier people, and the people left behind are going to be the more expensive enrollees. And so this goes to another, you know, issue with the marketplaces, which is that you need plenty of those healthy people to keep costs down. And when they drop off and decide to be uninsured, that's just a double whammy and the costs keep going up.

[A]

Where do we go from here? If Democrats get their way here, or even if later in December, all of them decide, sure, we'll extend these subsidies. Is this just a temporary fix to a bigger problem?

[B]

Well, it's funny, when I talk to people in the health policy space, there's one thing virtually everyone agrees on, and that is one would never construct a health insurance system like the one we have in the United States if you were starting from scratch. So, you know, there are these just chronic problems, you know, that we do have. Of course, there's continued to be some population of people that remains uninsured. We haven't figured out how to literally get health insurance to everyone. But covering this issue over the last decade, you know, it's really hard to see going forward how we get any more substantial changes to the health insurance landscape because of how partisan the issue has been. You know, over the last 15 years, it's been a lot of fights, of course, about the Affordable Care Act. And so, you know, there are, there are other kind of side issues that we're definitely seeing the administration try to address, like drug prices, things like that. But in terms of big insurance reforms, you know, I think it's going to be a lot of, you know, trying to kind of change things on the margins. But we're pretty set as things are right now. I don't think we're going to be seeing any big changes.

[A]

And where does health insurance affordability go from here?

[B]

Well, you know, back when they passed the aca, President Obama said it was going to bend the cost curve. And it, it turns out that didn't happen. We still see health insurance costs going up, and there are a lot of reasons for that. I mean, one is really expensive pharmaceuticals. Another is just ongoing chronic disease among our population. A lot of people with diabetes and obesity. We also haven't figured how to turn that around. And so I don't see any reasons why we're gonna see, you know, diminished health insurance costs. If anything, they're probably gonna continue to go up.

[A]

Well, Paige, thanks so much for explaining all of this. I really appreciate it.

[B]

Thanks for having me on.

[A]

Paige Winfield Cunningham is a national health reporter for the Post. If you love our show, help other people discover it by leaving a rating on Spotify or a rating and review on Apple Podcasts. Today's show was produced by Rennie Srinofsky with help from Lucas Trevor. It was mixed by Shawn Carter and edited by Ariel Plotnick. Thanks to Fennet Neerapil. I'm Elahe Izadi. We'll be back tomorrow with more stories from the Washington Post. At Constellation, we bring the energy powering America's growing economy every minute, every day. As the nation's largest producer of clean and reliable American made energy, Constellation is wherever you are.

[C]

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