How Obamacare Is Colliding With Shutdown Negotiations

Republicans in Congress who have long railed against Obamacare are showing new openness to extending subsidies under the law. Democrats are signaling that they are ready to block a bill that would avert a government shutdown without concessions on health care and other issues.

Unless Congress acts to extend health care tax credits created by Democrats during the pandemic before the subsidies expire on Dec. 30, around four million people are projected to lose coverage starting next year, and prices would go up for around 20 million more.

Separately, Congress is facing a Sept. 30 deadline to fund the government, and Republicans and Democrats have made little headway on a deal for a stopgap spending measure to avert a shutdown and buy more time for a longer-term funding agreement.

The two expiration dates have become intertwined in recent days as Democrats weigh whether to provide the votes Republicans would need to allow any spending measure to move forward in the Senate, where 60 votes are needed for any major legislation to advance.

The parallel deadlines have created a political dilemma for members of both parties. Republicans have insisted on spending cuts and said they don’t want to add extra provisions to the funding bill. But while they have long resisted extending Obamacare subsidies, many are eager to insulate their party on health care after almost all of them voted over the summer to enact legislation that makes deep cuts to Medicaid.

The issue also has fueled an internal debate among Democrats. Party leaders are deciding whether a deal that included extending the subsidies would be enough for them to team up with Republicans to avert a shutdown amid acute pressure from their base to withhold their votes in protest of President Trump’s policies.

The two top Democrats in Congress, Senator Chuck Schumer and Representative Hakeem Jeffries, both of New York, said on Thursday that their members would not support a spending bill that simply extended current funding levels. They suggested they were looking for concessions on health care and other issues, without specifying what those might be.

“House and Senate Democrats are prepared to enter into a bipartisan spending agreement that meets the needs of the American people, including as it relates to their health care and economic well-being,” Mr. Jeffries said on Thursday at the Capitol, standing next to Mr. Schumer.

Though few Republicans love Obamacare, some have grown concerned about a political backlash if the subsidies expire and their constituents face higher costs or lose coverage. Democrats have centered their midterm campaign message on assailing G.O.P. lawmakers for the Medicaid cuts that were part of the major tax and domestic policy bill they delivered to Mr. Trump in July.

“The last thing we want to do for the purposes of Democrats is have another bad message on health care policy,” said Senator Thom Tillis, Republican of North Carolina, who announced his retirement shortly before voting against the sprawling policy bill.

Surveys by independent and Republican pollsters show strong public support for the Obamacare funding, which lowers the cost of health insurance for nearly all Americans who buy their own coverage, nearly 25 million people. Obamacare was set up to help people pay insurance premiums on a sliding scale according to their income. But the newer tax credits increase the amount of federal help, making insurance effectively free for many Americans close to the poverty line and offering new financial assistance to individuals earning more than around $60,000.

Enrollment in Obamacare plans begins on Nov. 1, when people will begin shopping online, another deadline that is weighing on lawmakers who are concerned about coverage losses.

“Once a consumer logs in and sees their premium is going up, say, 75 percent they might just walk away,” said Cynthia Cox, the director of the program on the A.C.A. at KFF, a nonpartisan health research group.

If an extension were to pass, it would be the first time Republicans have approved legislation to expand Obamacare, a law whose enactment they unanimously opposed and which they have attempted to repeal many times in the decade and a half that has followed.

Ten House Republicans, most of them representing swing districts, have signed on to legislation to extend the tax credits to January 2027.

Representative Jen Kiggans, Republican of Virginia, who is leading the bill, said that more than 33,000 of her constituents rely on the subsidies.

“A 60-year-old couple earning $82,800 would face nearly $12,000 in higher annual premiums,” Ms. Kiggans said.

Several Republican senators also have expressed some support for the subsidies, including Lisa Murkowski and Dan Sullivan of Alaska, and Tommy Tuberville of Alabama.

Others, including Mike Crapo of Idaho, James Lankford of Oklahoma and Shelley Moore Capito of West Virginia, have declined to rule out an extension when asked by reporters whether they would support one.

Senator Jeanne Shaheen, a New Hampshire Democrat who is retiring at the end of the year, has made extending the subsidies a major priority. She has been discussing the issue with Republican colleagues.

“Fighting the affordability crisis shouldn’t be a partisan issue, and I know many Republicans understand the stakes,” she said.

But a deal over the subsidies is far from guaranteed.

Mr. Trump, whose preferences have guided most legislative decision-making, has yet to weigh in. His support could nudge more Republicans to endorse a subsidy extension, but his opposition could also sink a deal.

Senator John Thune of South Dakota, the majority leader, told reporters on Tuesday night that he would not pair the pending spending bill with an extension of the tax credits, saying that he preferred a “clean” bill. He had previously encouraged Democrats to “come forward with a solution,” suggesting he would consider an offer.

Republicans voted repeatedly this summer to oppose the Obamacare extension when the idea was introduced in amendments to their big tax bill. But their positions have appeared to soften in recent days.

In remarks last week, Speaker Mike Johnson said “I don’t love the policy.” But he also expressed sympathy for his colleagues who supported the subsidies. “I understand the political realities and the realities of people on the ground,” he told Punchbowl News. “And this is real to folks.”

Conservative critics dislike the subsidies, arguing that they stick the federal government with too much of the bill for people’s health coverage. Researchers at the Paragon Health Institute, a research group influential on Capitol Hill, have also raised concerns about fraud among people enrolled in plans with zero-dollar premiums.

In a recent letter to lawmakers, analysts at the Congressional Budget Office estimated that around 2.3 million people are enrolled in Obamacare plans who technically earn too little to be eligible for subsidies, though the budget office did not say those errors were fraudulent.

“We’re trying to educate on the extent of the fraud,” said Brian Blase, Paragon’s president. “The fraud and the improper enrollment is just massive.”

Other lawmakers have said taxpayers should not be subsidizing insurance for higher earners.

Representative Chip Roy, Republican of Texas and an influential hard-liner, wrote on social media that he would oppose extending “$400 BILLION in Biden’s COVID-era expansion of Obamacare subsidies that are increasing the cost of healthcare.”

Megan Mineiro contributed reporting.