BY Amanda F. Hobbs, Esq. and Michael Alexander, Esq., Brown & Fortunato, P.C.
October 1, 2025, kicked off the longest government shutdown in U.S. history, lasting 43 days total. Come January 30, 2026, we may be in for an even longer standoff should no bipartisan agreement come to fruition. So, what had lawmakers so riled up? And why might it happen again so soon?
To answer this question, we have to look at the repercussions of two competing bills – The Inflation Reduction Act (IRA), signed in 2022 under the Biden administration, and the One Big Beautiful Bill Act (OBBBA), signed on July 4, 2025 under thesecond Trump administration – on two different healthcare payment programs – Medicaid and the 
Affordable Care Act (ACA).
The IRA extended the “enhanced premium tax credits” introduced by the American Rescue Plan Act of 2021 through the end of 2025. These tax credits decreased the cost of ACA coverage for those who already qualified, while also extending eligibility for sliding-scale tax credits to those with income above 400% of the federal poverty level, thereby increasing the number of insured among those who might have otherwise chosen to forego coverage, adding many healthy Americans to the insurance risk pool. These changes more than doubled the number of people enrolled in ACA plans – increasing the total from 11 million to over 24 million over just four years, thereby diluting the risk pool while also drastically decreasing the number of uninsured individuals who make up the “uncompensated care” portion of a hospital’s balance sheet.
Prior to the anticipated expiration of these enhanced premium tax credits, Congress passed the OBBBA. The OBBBA made changes to both the Medicaid and ACA programs with a goal of slashing federal healthcare costs. With respect to Medicaid, among other cost cutting measures, the OBBBA imposes new work requirements, shortens renewal periods, and imposes other administrative barriers to access. As a result, fewer people who qualify for Medicaid will actually remain enrolled in Medicaid. On the ACA side, the OBBBA shortens the enrollment period, removes automatic reenrollment options, eliminates eligibility for many lawfully present immigrants, and limits the opportunity to enroll for those who are on the cusp of qualifying for Medicaid, along with several other changes to the program. As a result, fewer people will qualify for an ACA plan, and fewer people that do qualify for an ACA plan will remain enrolled. Practically, the “slashing” of federal healthcare costs under this bill is primarily affected through slashing enrollment and coverage. It has been estimated that 10 million people are expected to lose coverage under the OBBBA alone over the next decade. These individuals are taken out of the insurance risk pool and will now move to the “uncompensated care” side of the ledger.
This brings us to the October shutdown – the standoff over whether the enhanced premium tax credits created by the IRA should be extended. Because the shutdown failed to result in the extension of these tax credits, it is estimated that an additional 14 million people will either lose coverage or choose to forego coverage over the next ten years, which, combined with the losses due to the OBBBA, would result in a total loss of coverage for roughly 24 million people within the next decade. These 24 million individuals will no longer be in the insurance risk pool and will fall under “uncompensated care” totals for hospitals and medical providers across the country.
As a result of the anticipated exit of over 24 million people from health care coverage, the cost of ACA plans is skyrocketing – doubling in many instances – while tax credits to subsidize these costs are disappearing. This creates a snowball effect that not only destabilizes the insurance market, but also the healthcare industry as a whole. The exit of healthy adults from the insurance marketplace due to increased costs further increases the cost of insurance, as healthy folks are no longer subsidizing the medical costs of those with substantial healthcare needs, which results in even fewer who are able to afford coverage. This adds to the number of uninsured and increases the burden hospitals bear for uncompensated care overall. In addition, those without insurance do not seek adequate preventative care and end up in the emergency department, further increasing the numbers of uninsured seeking hospital care that goes uncompensated. Meanwhile, the anticipated decrease in Medicaid enrollment will deprive hospitals of a vital lifeline, further increasing uncompensated care burdens. The consequences to hospitals of this cascading coverage crisis are expected to include further outright hospital closures, as well as closures of obstetrics, pediatrics, and mental health service lines for hospitals operating on increasingly thin margins.
To use Texas as an example, it is estimated by KFF that 1.7 million Texans will lose coverage under ACA plans in the wake of the 2025 changes, and that another 200,000 will lose access to Medicaid. It is estimated that Texas hospitals alone will have to absorb another $1.5 billion in uncompensated care due to the rising rate of uninsured patients expected in the wake of the OBBBA and expiration of enhanced premium tax credits. It is important to note that Texas already has the highest uninsured rate in the country, at 17.4%, meaning that Texas hospitals are already strained under a massive uncompensated care burden of roughly $6.8 billion. Should a resolution not be reached in January, hospitals already operating with reduced services may be forced to close, while others near the margins may move toward service reduction, further decreasing access to care in communities that often do not have many options to begin with.
As Congress comes back into session in January, they are faced with a choice – either the discharge petition from the House to reinstate the tax credits for three years can be accepted by the Senate; a bipartisan solution may be reached; or another shutdown may occur come January 30th. In the alternative, Congress may choose to do nothing, leaving hospitals and patients to suffer the consequences.