Open enrollment for 2026 is underway, but the landscape for Affordable Care Act (ACA) subsidies remains unsettled. Enhanced premium tax credits, elevated under the Biden-era American Rescue Plan, are set to expire at the end of 2025. Without these subsidies, many Obamacare plans could become substantially more expensive, with average premiums rising by roughly $1,000 per month for marketplace enrollees. The political stalemate over extending subsidies has intensified the government shutdown, complicating decisions for individuals weighing coverage options this season.
Why Premiums Could Be Higher This Year
On November 1, the first day of 2026 open enrollment, many consumers encountered noticeably higher premiums. The rate hikes reflect the assumption that enhanced premium tax credits will not be extended. These expanded credits previously doubled subsidies and removed the income cap, contributing to higher enrollment and record-low uninsured rates. Absent continued subsidies, insurers anticipate higher risk in the market as younger, healthier enrollees may opt out, driving up costs for remaining participants.
Impact on Consumers
The loss of enhanced subsidies could push out-of-pocket costs higher for many buyers. People who previously benefited from subsidies may see reduced assistance, while insurers adjust pricing to account for anticipated risk. The overall effect is a potential price shock for those who rely on ACA coverage to protect against high medical costs.
Policy and Enrollment Timing
If Congress acts during open enrollment, regulators may implement changes within days to weeks. However, there is no certainty that subsidies will be extended this cycle. For shoppers, the practical takeaway is to enroll by the 2026 deadlines to avoid a coverage gap, even if subsidies remain in limbo. Open enrollment runs from November 1 to January 15 in most states, with a cutoff of December 15 to start coverage on January 1, 2026; enrollments from December 16 to January 15 begin February 1, 2026.
Strategic Guidance for Shoppers
Avoid auto-enrollment. Premiums for 2025 plans may no longer be competitive, and a rule under a potential new administration could alter premium structures for those eligible for $0 premiums.
Monitor updates. Regularly revisit your marketplace account to reflect any changes in income or household status, so you can capture new subsidies if they become available.
Consider Silver plans for potential subsidies. Cost-sharing reductions (CSRs) are available only with Silver plans and can lower out-of-pocket costs. If subsidies vanish, these reductions become more valuable.
Evaluate the plan price, not just the sticker premium. A lower premium that yields a higher deductible or out-of-pocket maximum may not be the best value. Analyze total cost of care when comparing plans.
Understand backup options. High-deductible and catastrophic plans carry lower premiums but higher upfront costs. Short-term plans offer minimal coverage and should be considered only as a last resort.
What to Expect from Insurers
Insurers submitted two rate sets: one assuming enhanced premium tax credits and another assuming they expire. This dual-rate approach means marketplaces could “flip a switch” to reflect updated subsidies if Congress acts. If legislation passes, state and federal marketplaces may take from a few days to a few weeks to implement the changes.
Additional Context
The annual open enrollment period is a critical window for obtaining coverage and subsidies. If subsidies do not materialize, the consumer burden can rise substantially, particularly for individuals in their 60s with moderate incomes.
Some enrollees may receive retroactive subsidies if Congress acts later; however, this is not guaranteed and should not be relied upon by shoppers as a timing strategy.
Key Data Points
Premiums could rise by about $1,000 per month for average ACA enrollees without enhanced tax credits.
Without subsidies, older adults at middle income levels may face substantially larger premium costs.
The number of insurers and plan options remain robust, with major carriers offering coverage across many states, though premium affordability remains a central concern.
Practical Takeaways
- If you need ACA coverage, begin shopping early and review multiple plan options.
- Update income and household information promptly to capture any potential subsidies.
- If you are eligible for CSRs, prioritize Silver plans to reduce out-of-pocket costs.
- Do not delay enrollment past the final deadline to avoid a gap in coverage, even amid subsidy uncertainty.
Related topics
