Democrats are holding the government hostage over temporary COVID-era ACA subsidies that have led to widespread fraud and cost taxpayers $27 billion.

Democrats are holding the government hostage in an extended government shutdown over temporary, COVID-era Affordable Care Act (ACA) subsidies that were meant to make health insurance cheaper – or free – for millions of Americans during the pandemic. But like most pandemic relics, the cost of these subsidies far outweighs any potential benefits.

Rather than forcing an extension of the temporary, bumped-up subsidies through the spending bill, policymakers should allow them to expire at the end of the year and focus instead on healthcare reforms that actually help patients. 

According to Democrats, including Joe Biden, inflated COVID-era ACA subsidies were always meant to be a temporary "economic bridge through the crisis," not a permanent expansion of government. But now, Democrats are claiming that returning to pre-COVID Obamacare would be a catastrophe – a not-so-tacit admission that the health insurance scheme they’ve lauded the past 15 years is no good. And it isn’t.

As mothers managing healthcare for our families, we’ve lived the healthcare system’s failures. When Mary Katharine was seven months pregnant and her husband tragically passed away, she was informed that she’d lost her third or fourth health insurance plan since the ACA passed, leaving her with a costly, ineffective plan, despite the Obamacare promise that she could keep her insurance if she liked it.

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To make the already broken ACA system worse, Biden’s emergency measure increased the dollar amount of ACA subsidies and expanded the number of people eligible for taxpayer support. Rather than helping the needy, these subsidies go straight to insurance companies – padding their profits at the expense of American taxpayers and creating a breeding ground for enrollment fraud and abuse.

The subsidies, along with weakened income verification, have led to skyrocketing improper enrollments. According to the Paragon Institute, more than 6.4 million people were improperly enrolled in 2025, costing taxpayers $27 billion. 

Zero-claim enrollees, people who are enrolled but have never filed a claim, have also skyrocketed, signaling widespread fraud. Forty percent of those enrolled in fully subsidized plans filed zero claims, compared to the typical 15% of zero-claim enrollees in private plans.

And because ACA subsidies are based on current income with no consideration of assets, even wealthy people can claim full subsidies and get free coverage. A couple with $1.5 million in investable assets who retired at 46 to travel the world bragged on Reddit that they are getting the maximum ACA subsidy while "on a 5-month slow travel tour of the British Isles and Ireland, a dream trip." 

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Dream for them. Nightmare for taxpayers and the vulnerable Americans whose coverage and care is diluted by those abusing the system.

Republicans in Congress and the White House are rightly identifying the American people’s outrage at handing bumped-up subsidies to bloated insurance companies, when cost-effective, patient-centered healthcare solutions exist. 

Contrary to misleading polls by the Kaiser Family Foundation and The Washington Post, a recent poll from Americans for Prosperity found that, when voters were given a neutral description of the subsidies and the two alternatives – extend the bumped-up subsidies or return to the pre-COVID subsidies – 38% favored letting them expire, 30% wanted them extended, and a third were undecided.

The poll also found that 66% of American voters – including 27% of Democrats – would rather Congress expand free market options like healthcare savings accounts and direct primary care over renewing the expiring subsidies (17%). 

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These free-market solutions show great promise in reducing healthcare costs and allowing for more personalized care. 

For instance, with direct primary care, doctors operate on a monthly retainer rather than insurance coverage, a Netflix-style subscription model that reduces red tape and paperwork, leaving more time for the doctor-patient interaction.

Removing barriers such as telehealth restrictions and certificate of need laws that require state permission to open a hospital would also lower costs and increase access. 

And HSAs – tax-advantaged savings accounts that allow individuals to save and pay for qualified medical expenses – give patients more choice and control over their medical decisions. We’ve seen HSA benefits firsthand. Lauren uses an HSA to get faster, higher-quality care by avoiding insurance paperwork and network approvals. We’re encouraged that access to these plans is expanding to an additional 1.6 million Americans in 2026, thanks to the Working Families Tax Cuts legislation. But there is more to be done.

The government shutdown should serve as a wakeup call to buck the status quo and bring better healthcare options to families. With fraud, waste and ballooning costs undermining the current system, it’s time to shift toward solutions that put patients, not bureaucrats or insurers, in control.

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Lauren Stewart is senior federal legislative liaison at Americans for Prosperity and Concerned Veterans for America.