By Amina Niasse and Richard Cowan
NEW YORK/WASHINGTON, Jan 15 (Reuters) – Millions of Americans are facing higher healthcare costs in 2026 as open enrollment for most federally subsidized Obamacare plans closes on Thursday and Congress remains divided on whether and how it should reinstate generous COVID-era tax credits.
In 2025, about 24 million people were enrolled in the plans, created by President Barack Obama’s signature Affordable Care Act. Of them, about 22 million received subsidies.
On average, premium costs will increase to $1,904 in 2026 from $888 in 2025, according to KFF, a health policy firm.
Those cost hikes mean some buyers will need to make trade-offs in their household budget, settling for a lower level of coverage, or by dropping coverage altogether, said Cynthia Cox, a senior vice president at KFF.
As of Monday, 22.8 million people had signed up for plans on the Healthcare.gov website and on the sites run by 20 states, most of them led by Democrats. In eight of those states and in Washington, D.C., open enrollment has been extended.
STATES FIND FUNDS TO HELP
Other states, including Massachusetts, California, Colorado, Connecticut, Maryland, and New Mexico, have pledged funds to help lower- and middle-income households manage the costs.
Christina Cousart, a director at the National Academy for State Health Policy, said state-level financial relief is unlikely to fully counteract cost increases because of the size of the funding gap and increasing costs for Medicaid, the government insurance program for lower-income Americans.
Pennsylvania has considered freeing up $50 million, far less than the $600 million its residents received in subsidies.
“The levels we had talked about are a drop in the bucket compared to the federal amount of money,” said Devon Trolley, executive director of Pennsylvania’s marketplace.
Republican-controlled states do not plan such financial relief despite the fact that their residents have benefited the most from the COVID-era subsidies because those states did not expand Medicaid coverage under the ACA.
Eight of the 10 states with the highest share of population receiving ACA subsidies – Florida, Georgia, Texas, Mississippi, South Carolina, Alabama, Tennessee and North Carolina – are Republican-led states that voted for Trump.
UNCERTAINTY ABOUT A DEAL
Retroactive expanded federal subsidies are still possible.
Republican U.S. Senator Bernie Moreno of Ohio, who is part of a bipartisan group of senators negotiating a potential subsidy extension for this year, told reporters on Tuesday a deal has to get done by the end of January, “not February.”
Democratic U.S. Senator Tim Kaine of Virginia, also a part of the negotiating group, told Reuters the deal has a “fighting chance” but that it was being delayed as negotiations on the text of a compromise bill continued.
Abortion is a main point of contention, he said. Lawmakers disagree on whether Obamacare plans strictly comply with the Hyde Amendment, which bans the use of federal funds for the procedure.
President Donald Trump said on Tuesday he will announce a healthcare affordability framework this week, the latest White House promise to address rising healthcare costs. Affordability is expected to be a key election issue this year.
ENROLLMENT COULD DECLINE EVEN MORE
The government’s 2026 enrollment figures announced this week include those who had been automatically enrolled for another year, and who may ultimately lose coverage, experts said.
Michele Eberle, executive director at Maryland Health Benefit Exchange, said that such renewed enrollments cannot be canceled by insurers for non-payment for 90 days.
“We won’t know if they’re truly terminated for non-payment of premiums until the beginning of April,” Eberle said.
If the subsidies are extended by Congress, and a special enrollment period is created, that could benefit insurers as lower costs pull in more healthy people who require less immediate healthcare services.
Marty Anderson, chief strategy and business development officer at Group Health Cooperative of South Central Wisconsin said the non-profit health plan is engaging consumers who have not yet paid their January premiums, about 30% of its members.
Even a late extension of the subsidies would help insurers in 2027, as it would mean more healthy people within the pool to keep rates lower, Anderson said.
(Reporting by Amina Niasse in New York; additional reporting by Ahmed Aboulenein and Richard Cowan in Washington; Editing by Caroline Humer and Bill Berkrot)
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