Vice President JD Vance spoke disparagingly about the Affordable Care Act (ACA) on Sunday, calling its insurance tax credits “vehicles for fraud” and urging greater regulation and reform. His comments come as Democratic legislators are attempting to extend the same subsidies Vance wants to reform — a battle now at the forefront of the ongoing federal government shutdown.
Vance, on CBS News’ Face the Nation, said the current healthcare credit system, a staple of the ACA (also known as Obamacare), in most cases benefits insurance companies more than it benefits ordinary Americans.
The tax credits appropriately belong to some individuals,” Vance said, “but we feel a lot of that money is wasted through fraud and lack of efficiency within the insurance companies. We want to make sure the tax credits reach the people who actually need them.”
Healthcare Moves to Forefront of Shutdown Fight
The government shutdown, now in its third week, has largely put progress on funding negotiations at a standstill. Senate Democrats, who hold key procedural leverage, have refused to support a short-term spending measure unless it includes the renewal of the ACA’s enhanced premium tax credits, which are set to lapse at the end of the year.
These tax credits, which were first expanded under the Biden-Harris administration, significantly lowered premiums for low- and middle-income Americans who buy insurance through the ACA marketplace. If the subsidies are allowed to lapse, premiums would rise by an average of 50% for many enrollees, the Kaiser Family Foundation reports.
Democrats argue that the extension of the subsidies is needed to protect healthcare affordability amid persistent inflation and sky-high medical costs.
You have people who are facing skyrocketing healthcare expenses because some of my colleagues refuse to even have a discussion about extending these credits,” House Minority Leader Hakeem Jeffries (D–NY) said on Fox News Sunday. “That’s unconscionable at this moment.”
Republicans Demand Post-Shutdown Negotiations
Republicans, who control both chambers of Congress, have proposed a short-term spending bill that would keep the government funded until November but have insisted that the ACA tax credit extension not be included in that bill.
Party leaders, including Vance, argue that broader reforms to curb fraud and control costs need to come before the subsidies are expanded.
We believe Obamacare imposed unnecessary regulations that benefit big insurance companies, not patients,” Vance said. “If we simplify those regulations and cut out waste, we can deliver better healthcare at lower costs.”
President Donald Trump, questioned last week about the healthcare talks, said he is “open to talking” but insisted that “serious policy discussions can only occur once the government is reopened.”
24 Million Americans Could Be Affected
More than 24 million Americans are currently enrolled in the Affordable Care Act marketplaces, which were established to provide coverage for those who do not have employer-sponsored coverage. The annual open enrollment period for 2025 coverage is scheduled to begin November 1, so time is running short for Congress to break the deadlock.
Should the current subsidies not be continued, millions would experience an increase in their monthly premiums, with some dropping coverage altogether, analysts say.
Healthcare policy analysts point out that the furor underscores a basic philosophical divide between the two parties: Democrats wish to strengthen the ACA and expand access to affordable coverage, whereas Republicans favor deregulation and piecemeal reform to reduce costs and public spending.
This is really a philosophical debate over what’s supposed to be the role of the federal government in healthcare,” said Dr. Alicia Morrison, a senior health policy analyst at the Brookings Institution. “Democrats view the tax credits as a social safety net, and Republicans view them as a font of waste and inefficiency.”
Economic Stakes and Political Fallout
The shutdown schedule puts pressure on both sides. With the ACA sign-up deadline approaching and critical federal programs being interrupted, public frustration builds. The standoff has already imposed temporary furloughs at many federal agencies and delayed the release of key economic data.
If the shutdown continues, political analysts warn that both parties will be subject to voter backlash — but the danger may be higher for Republicans, who are growing increasingly criticized for their handling of healthcare and fiscal policy.
The GOP walketh a delicate line,” commented Thomas Eddington, a Georgetown University political strategist. “Waste is one thing to criticize, but obstructing healthcare subsidies that benefit middle-class families directly may boomerang politically, particularly going into an election year.”
The Road Ahead
With negotiations stalled, both parties seem dug in. Democrats are insisting on prompt action on healthcare affordability, and Republicans are demanding structural reforms across the board before agreeing to any additional funding.
Despite deep divides, some bipartisan health policy experts think that there can be a compromise — one that temporarily extends ACA subsidies while calling for a federal audit of the tax credit system in an attempt to address fraud concerns.
For now, however, the standoff continues, with millions of Americans — and the nation’s healthcare system — caught in the political crossfire.
