By executive order president Trump stopped ACA subsidies to state insurance exchanges. Given that this appears to have come out of left field, I would assume that funds were allocated for some amount of time into the future. What happens to those funds?
I would assume that funds were allocated for some amount of time into the future.
This is untrue. The funds were never allocated. The government has just been spending them anyway. That's why Donald Trump could simply end them.
The United States is running a deficit. So the last money spent is borrowed. If they don't spend up to the deficit, they just won't borrow that money.
Of course, in this particular case, the expectation is that other, authorized expenditures will increase as a result of the elimination of this subsidy. So you could think of the money as being transferred there, with additional borrowing.