The number of Americans using health insurance plans available through the Affordable Care Act (ACA), or Obamacare, is expected to increase as discussions about extending enhanced subsidies hit a critical point during the ongoing government shutdown.
Obamacare has provided tax credits to help lower health insurance premiums for those purchasing plans through its exchanges, based on income. In 2021, during the COVID-19 pandemic, Congress made these premium tax credits more generous, extending them into 2025 through the Inflation Reduction Act. However, with the current government shutdown, this vital support is now uncertain.
Approximately 24 million Americans are enrolled in insurance plans under the ACA, and insurers are expected to inform their customers of impending premium increases as open enrollment for 2026 begins on November 1. The Kaiser Family Foundation (KFF) estimates that premiums through the ACA exchanges may rise by an average of 26% in 2026. Specifically, states operating their own exchanges could see rates increase by about 17%, while states using Healthcare.gov may see hikes of around 30%.
A significant majority of enrollees—22 million—benefit from tax credits. If Congress decides to keep these enhanced credits, the cost for many subsidized enrollees will remain stable despite rising premium rates. On the contrary, if these credits are not renewed, KFF warns that enrollees receiving current subsidies could face a staggering 114% increase in their monthly premiums.
The abrupt cost changes reflect a wider issue. Those with incomes below four times the federal poverty level would receive reduced assistance, while individuals above that income threshold may lose their subsidies entirely, facing higher premiums without any tax relief.
Experts highlight that various factors contribute to rising premiums in the ACA Marketplace, including increasing hospital costs, the popularity of pricey medications, and now, the potential end of enhanced premiums. This situation adds pressure on already stretched budgets for American families.
As discussions continue, key Democratic leaders are advocating for the extension of the enhanced premium tax credits, intensifying the debate amid the broader context of government funding and spending. The possible expiration of these subsidies adds another layer of complexity to the already challenging landscape of American healthcare.
With many families relying on these programs, the outcome of this legislative fight will be crucial, impacting not just current enrollees but the future stability of America’s healthcare system as well.
