See how the federal government shutdown could impact Coloradans long-term

At its core, the federal government shutdown is a debate over how much taxpayers should subsidize health care for people who buy insurance on the exchange.

The Affordable Care Act (Obamacare) provided subsidies for lower income Americans.

In 2021, the American Rescue Plan expanded them to everyone on the exchange regardless of income, making insurance free for some people and capping premiums at 8.5% of household income for everyone else.  

That resulted in record enrollment on state exchanges and the federal marketplace.

In Colorado, 280,000 people bought insurance on Connect for Health last year, with the federal government subsidizing 80% of the policies at a cost of $328 million.

Nationwide, the government subsidized insurance for 22 million people at a cost of $103 billion dollars.

But, on Dec. 31, all that money dries up. Only the Obamacare subsidies for lower income people will remain. The expanded subsidies were meant to be temporary as part of COVID-19 relief.

If those are extended, the Congressional Budget Office says it will increase the deficit by $350 billion over the next 10 years. But, if they expire, the Colorado Division of Insurance says people on the exchange will pay 174% more on average.  

That's where the shutdown comes in.

Democratic leadership won't fund the government unless Republicans extend the subsidies permanently.

Republican leadership won't debate the subsidies until Democrats fund the government.

Some Republicans, including Colorado Republican Rep. Jeff Hurd, support a one-year extension of the subsidies if Democrats agree to reforms, saying the subsidies simply mask the real cost of health care, which is soaring.

Employer-sponsored health plans are expected to increase 9% on average next year -- the biggest spike in 15 years -- while plans on Colorado's exchange could increase by 28%.

Democrats say that's even more reason to extend the subsidies. If they expire, the Congressional Budget Office estimates 2 million people will drop insurance due to cost, leading to more uncompensated care that providers will likely pass on to those with insurance -- driving up costs further.

Democrats are sure to pin all the increased costs next year on Republicans, many of whom don't like the subsidies simply because they're tied to Obamacare.

In return, Republicans will pin the shutdown on Democrats, who won't reopen the government until Republicans make the subsidies permanent and roll back all their changes to Medicaid.

Ultimately, it's a fight with no one walking away as a winner.