Americans enrolled in health insurance plans offered through the Affordable Care Act, commonly known as Obamacare, are expected to rise next year as the debate over extending enhanced subsidies is a flashpoint in the ongoing federal government shutdown.
Since its enactment, Obamacare has offered subsidies in the form of tax credits for health insurance premiums on plans purchased through the ACA’s exchanges based on enrollees’ income levels. During the COVID-19 pandemic, Congress enacted enhanced premium tax credits in 2021 that were extended by Democrats’ Inflation Reduction Act through the end of 2025 – with the policy now caught up in the shutdown debate.
About 24 million Americans are enrolled in health insurance plans and open enrollment for 2026 opens on Nov. 1, with insurers notifying members about increases in insurance premiums that are coming next year.
The Kaiser Family Foundation (KFF) estimates that health insurance premiums through the Obamacare exchanges are set to increase 26% on average in 2026. On state-operated ACA exchanges, the average benchmark (or second-lowest cost) silver tier premium that’s used to calculate the tax credit is set to rise 17%, whereas states using Healthcare.gov are rising 30% on average, according to KFF.
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The group noted that of the 24 million Americans enrolled in Obamacare plans, 22 million currently receive a tax credit and that if Congress ultimately extends enhanced tax credits, the amount paid by subsidized enrollees would be about the same despite insurers charging more.
By contrast, if the enhanced premium tax credits expire, KFF estimates that enrollees who are currently receiving a subsidy would see their monthly premium payments more than double – rising by about 114% on average.
The group said that the increase reflects people with incomes below four times the federal poverty level receiving less financial assistance, and those with incomes above that threshold no longer being eligible for financial assistance and facing both higher premiums and the loss of the tax credit.
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“The amount insurers charge for ACA Marketplace premiums is rising for several reasons, including but not limited to increasing hospital costs, the rising popularity of expensive GLP-1 drugs like Ozempic, and the threat of tariffs,” KFF wrote. “These factors are similarly cited by insurers selling employer coverage.”
“However, an additional factor driving up the amount insurers charge for ACA Marketplace premiums (that is not affecting employer premiums) is the expected expiration of the enhanced premium tax credit,” the group said.
KFF’s report noted that insurers participating in the ACA Marketplace that they would charge about 4 percentage points more, on average, than they otherwise would have because they expected that healthier people would drop coverage if the enhanced premium tax credits expire.
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