Why is there a government shutdown?

(NEXSTAR) – Lawmakers failed to reach an agreement to fund the federal government by midnight on Tuesday night, triggering a shutdown on Wednesday. At the heart of the deadlock are health insurance subsidies.

Here’s what to know about the key sticking points in the budget negotiations.

What are the tax credits lawmakers disagree on?

At issue are tax credits that have made health insurance more affordable for millions of people since the COVID-19 pandemic. The subsidies, which go to low- and middle-income people who purchase health insurance through the Affordable Care Act, are slated to expire at the end of the year if Congress doesn’t extend them.

Their expiration would more than double what subsidized enrollees currently pay for premiums next year, according to an analysis by KFF, a nonprofit that researches health care issues.

About 90% of people who purchase health insurance through the Affordable Care Act currently benefit from these subsidies. As The Hill has reported, the cost of health insurance premiums could skyrocket for 22 million Americans if subsidies are allowed to expire.

Annual out-of-pocket premiums for those Americans are estimated to increase by 114% — an average of $1,016 — next year, according to the KFF analysis.

What are Democrats’ demands? What are Republicans’ demands?

Democrats in the Senate on Wednesday voted against the House-passed stopgap funding bill that would temporarily fund the government through Nov. 21.

The Democrats who shot down the funding bill insisted any budget should include an extension for the health care subsidies. They also want any government funding bill to reverse the Medicaid cuts in President Donald Trump’s “Big Beautiful Bill” passed this summer, which don’t go into effect immediately but are already driving some states to cut Medicaid payments to health providers.

Republicans, meanwhile, say negotiations on the health care subsidies can continue once the government is back open.

“If there are Democrats out there who will recognize it needs to be reformed and are willing to work with us … we are willing to have that conversation,” said Senate Majority Leader John Thune (R-S.D.), as The Hill previously reported.

The Associated Press contributed to this report.

Source: Fox 8 News Channel