As Open Enrollment Begins, Data Show A 30% Increase In Obamacare Premiums

Open enrollment in Obamacare has begun and will last until Jan. 15th. Data from 30 states that rely on the federal government to manage Affordable Care Act exchanges show that premiums are spiking on average by 30%. The New York Times reported this increase on Oct. 31st, based on a preview released by the Trump administration of the prices of available plans sold through ACA marketplaces in these 30 states.

In states that run their own ACA marketplaces, the rise in premiums will be 17% on average, according to an analysis by KFF. Across all 50 states, KFF estimates that premiums will increase by 26%. What could make this much more financially burdensome is if ACA subsidies expire, as they’re due to at year’s end. The increase in monthly premiums could then be much greater than 26%.

The federal government shutdown remains at an impasse, due in large part to the expiring ACA tax credits, which Democrats wish to preserve and make permanent before agreeing to a continuing resolution that would appropriate funds to allow normal government operations. Republican leaders say they want the government to reopen before discussing the issue of lapsing subsidies.

The loss of subsidies could leave millions of Americans dependent on them for affordable access to health insurance facing premium hikes that far exceed 30% or the loss of coverage altogether. The Congressional Budget Office estimates that the termination of subsidies will cause two million more people to become uninsured.

Enacted in 2010, the ACA expanded insurance access to the Medicaid program, barred insurers from denying coverage or hiking premiums for people with pre-existing conditions, mandated inclusion of a wide range of (preventive) services, required that all health plans offering dependent coverage allow young adults to stay on their parent’s plan until they reach the age of 26 and created federal and state exchanges for health insurers to offer coverage to people not enrolled in Medicare or Medicaid and without employer-based insurance.

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During last year’s open enrollment period, a record 24.3 million people signed up for ACA coverage. Nearly 60% of enrollees (re)signing up for 2026 coverage will still be able to find plans on the federal exchange with premiums at or below $50 a month, but this represents a considerable drop-off from 83% of beneficiaries who could do so for their 2025 coverage. Moreover, most of these cheaper plans will feature substantially increased deductibles and patient cost-sharing.

Furthermore, with tax credits that many Americans rely on to keep their premiums affordable due to run out, affordability of insurance will be at stake. Subsidized ACA enrollees have been mostly insulated from premium increases because such credits tie costs of insurance to their income. During the COVID-19 pandemic, the federal government created more generous subsidies for the ACA exchanges, which reached individuals earning up to around $60,000 a year. Without these enhanced subsidies, the CBO expects costs to rise by 75% for some people and as high as 90% for folks in rural areas.

An Urban Institute analysis found that the biggest impact from premium increases and expiring subsidies would be felt by middle class people who earn approximately $60,000 annually. They could face thousands of dollars more in out-of-pocket healthcare expenses next year if tax credits lapse. Moreover, a single person who earns more than $60,000 a year could lose all financial assistance.

It’s estimated to cost the federal government roughly $30 billion annually to extend these healthcare tax credits, which is far less than the indirect subsidies allocated to the much larger employer-sponsored segment of the health insurance market. Nonetheless, the ACA is a perennial flashpoint in American politics, which could help to explain why Obamacare subsidies are a sticking point in the current shutdown standoff.