Virginia Democrats and some Republicans want to extend ACA tax credits as shutdown looms
Set to expire at the end of the year, the credits help thousands of Virginians purchase health insurance through the state marketplace
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Several members of Virginia’s Democratic congressional delegation met virtually Monday morning to discuss their efforts to extend special tax credits that help people purchase health insurance through the Affordable Care Act marketplace. The credits will expire at the end of the year unless Congress renews them.
About 400,000 Virginians purchase health insurance through the state’s exchange, and some of those people qualify for Enhanced Premium Tax Credits, which were established in 2021, extended in 2022 and apply to people that earn between 100% and 400% of the federal poverty level. About 100,000 Virginians are expected to lose marketplace coverage, the state exchange’s director said.
Aetna has already pulled out of the marketplace and other insurers’ rates are expected to rise. Those who don’t have employer-provided insurance will renew or shop for new health plans this fall.
Alexandria resident and cancer survivor Laura Packard, who joined lawmakers on the call Monday, explained how her status as a small business owner means ACA marketplace is how she keeps her health care covered. It also saved her life when getting treatment to put her cancer in remission.
Packard noted that she is among those waiting to learn how much their premiums will rise. And while healthy people might choose to forgo health care in the interim if the price is too high, her status as a cancer survivor means she can’t exercise that option.
“Millions of people are going through this right now,” she said.
Congress has until the end of this month to pass spending legislation and formally fund the government for the 2026 fiscal year and avoid a government shutdown. Democrats are hoping to ensure the tax credits are extended permanently as Republicans present a spectrum of views on the matter.
With the GOP in control of Congress, addressing the credits could have been handled when passing the reconciliation bill they dubbed the One Big Beautiful Bill Act this summer, but it wasn’t included in the measure.
In lieu of cancelling the credits altogether, some Republicans, like U.S. Rep. Jen Kiggans, R-Virginia Beach, are pushing for a one-year extension of the credits. But Kiggans told Politico that she won’t force a government shutdown over the matter.
Democrats introduced a proposal at the start of the year to permanently extend the credits.
“Obviously, a one year extension is better than nothing,” U.S. Rep. Bobby Scott, D-Newport News, said on the press call.
Scott said that Kiggans’ idea is a way to buy political cover ahead of next year’s congressional midterm elections — which will be shaped in part by the controversial health care changes that stem from the OBBBA.
Those health care-related adjustments include changes to hospital funding mechanisms and Medicaid processes. Hospital systems and health care advocates have emphasized that thousands of people are expected to lose that form of health coverage and place some hospitals in the vulnerable position of reducing services or closures. The strain is expected to eventually pass onto private insurers who will raise rates.
“It just protects people from the immediate aftermath of inflicting this damage on the American people,” Scott said. “The problem was created by the failure to include (tax credit extensions) in the ‘One, Big Ugly Bill.’”
As rural and Republican-represented districts often include large portions of Medicaid recipients, Democrats have warned throughout the summer that their constituents may be among the hardest hit by negative impacts.
Six hospitals in Virginia are suspected to be most vulnerable to closures or service cuts while three health clinics in Shenandoah Valley closed recently with their owners, Augusta Health, citing the reconciliation bill as a factor.
In reframing the OBBBA as the “Working Families Tax Cut Act,” President Donald Trump’s administration announced applications for the Rural Health Transformation Fund last week. The fund emerged amid debates about the reconciliation bill this summer and is expected to give a boost to rural areas.
“We think we have an opportunity not just to plug a few of the holes, but to transform in a lasting way the rural health care system in this country,” Centers for Medicare and Medicaid Services administrator Mehmet Oz said last week of the fund, which comprises a $50 billion dollar investment over the next five years.
If their applications are accepted, states can direct funding towards things like workforce investment or upgrades to information technology, Oz mentioned on that call.
But former Health Resources and Services Administration head Carole Johnson called that fund a “band-aid” for larger problems that was used as a “political solution” to get the reconciliation bill through.
Meanwhile, both parties in Congress have put forth failed continuing resolutions to avoid a government shutdown while they resolve their differences.
When Democrats on Monday’s call were asked if they were willing to let the government shut down in the weeks ahead, U.S. Rep. Jennifer McClellan, D-Richmond, reiterated that Republicans control both chambers of Congress and the White House.
“We are not in charge. … We stand ready to work,” she said. “(Republicans) want to say if there’s a shutdown, ‘it’s Democrats’ fault,’ but the blame lays squarely at their feet.”
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