Obamacare

Californians renewing their public health plans or who plan to sign up for the first time will be in for sticker shock when open enrollment begins on Saturday. Monthly premiums for federally subsidized plans available on the Covered California exchange — often referred to as Obamacare — will soar by 97% on average for 2026.

The skyrocketing premiums come as a result of a conflict at the center of the current federal government shutdown, which began on Oct. 1: a budgetary impasse between the Republican majority and Democrats over whether to preserve enhanced, Biden-era tax credits that expanded healthcare eligibility to millions more Americans and kept monthly insurance costs affordable for existing policyholders. About 1.7 million of the 1.9 million Californians currently on a Covered California plan benefit from the tax credits.

Open enrollment for the coming year runs from Nov. 1 until Jan. 31. It’s traditionally the period when members compare options and make changes to existing plans and when new members opt in.

Only this time, the government shutdown has stirred uncertainty about the fate of the subsidies, first introduced during the COVID-19 pandemic and which have been keeping policy costs low, but will expire at the end of the year if lawmakers in Washington don’t act to extend them.

Californians window shopping on the exchange’s consumer homepage will have to make some tough decisions, said Covered California Executive Director Jessica Altman. The loss of the tax credits to subsidize premiums only adds to what can already be a complicated, time-consuming and frustrating process.

Even if the subsidies remained intact, premiums for plans offered by Covered California were set to rise by roughly 10% for 2026, due to spikes in drug prices and other medical services, Altman said.

Without the subsidies, Covered California said its members who receive financial assistance will see their monthly premiums jump by an additional $125 a month, on average, for 2026.

The organization projects that the cost increases will lead many Californians to simply go without coverage.

“Californians are going to be facing a double whammy: premiums going up and tax credits going away,” Altman said. “We estimate that as many as 400,000 of our current enrollees will disenroll and effectively be priced out of the health insurance that they have today. That is a devastating outcome.”

Indeed, the premium spike threatens to lock out the very Americans that the 2010 Affordable Care Act — President Obama’s signature domestic policy win — was intended to help, said Altman. That includes people who earn too much to qualify for Medicaid but who either make too little to afford a private plan or don’t work for an employer that pays a portion of the premiums.

That’s a broad swath of Californians — including many bartenders and hairdressers, small business owners and their employees, farmers and farm workers, freelancers, ride-share drivers, and those working multiple part-time gigs to make ends meet. The policy change will also affect Californians who use the healthcare system more frequently because they have ongoing conditions that are costly to treat.

By raising the tax-credit eligibility threshold to include Americans earning more than 400% of the federal poverty level, the Biden-era subsidies at the heart of the budget stalemate have brought an estimated 160,000 additional middle-income Californians into the system, Covered California said. The enhanced subsidies save members about $2.5 billion a year overall in out-of-pocket premium expenses, according to the exchange.

California lawmakers have tried to provide some relief from rising Covered California premiums by recently allocating an additional $190 million in state-level tax credits in next year’s budget for individuals who earn up to 150% of the federal poverty level. That would keep monthly premiums consistent with 2025 levels for a person making up to $23,475 a year, or a family of four bringing in $48,225 a year, and provide partial relief for individuals and households making slightly more.

Altman said the state tax credits will help. But it may not be enough. Forecasts from the Urban Institute, a nonprofit research group and think tank, also show a significant drop-off of roughly 400,000 enrolled members in Covered California.

The national outlook is even worse. The Congressional Budget Office warned Congress nearly a year ago that if the enhanced premium subsidies were allowed to expire, the ranks of the uninsured would swell by 2.2 million nationwide in 2026 alone — and by an average of 3.8 million Americans each year from 2026 to 2034.

Organizations that provide affordable Obamacare plans are preparing for Californians to get squeezed out of the system if the expanded subsidies disappear.

L.A. Care, the county’s largest publicly operated health plan, offers Covered California policies for 230,000 mostly lower-income people. About 90% of the Covered California consumers they work with receive subsidies to offset their out-of-pocket healthcare insurance costs, said Martha Santana-Chin, L.A. Care’s CEO. “Unless something drastic happens … a lot of those people are going to fall off of their coverage,” Santana-Chin said.

That outcome would ripple far and wide, she said — thanks to two factors: human behavior and basic economics.

If more and more people choose to go uninsured, more and more people will resort to visiting hospital emergency rooms for non-emergency care, disrupting and overwhelming the healthcare system.

Healthcare providers will be forced to address the cost of treating rising numbers of uninsured people by raising the prices they bill to insurers for patients who have private plans. That means Californians who are not Covered California members and don’t receive other federal healthcare aid will eventually see their premiums spike too, as private insurers pass any added costs down to their customers.

But right now, with the subsidies set to end soon and recent changes to Medicaid eligibility requirements threatening to knock some of the lowest-income Californians off of that system, both Altman and Santana-Chin said their main concern is for those who don’t have alternatives.

In particular, they are concerned about people of color, who are disproportionately represented among low-income Californians, according to the Public Policy Institute of California. Any hike in out-of-pocket insurance costs next year could blow the budget of a family barely getting by.

“$100, $150, $200 — that’s meaningful to people living on fixed incomes,” Altman said. “Where is that money coming from when you’re living paycheck to paycheck?”

WASHINGTON — The first caller on a telephone town hall with Maryland Rep. Andy Harris, leader of the House’s conservative Freedom Caucus, came ready with a question about the Affordable Care Act. Her cousin’s disabled son is at risk of losing the insurance he gained under that law, the caller said.

“Now she’s looking at two or three times the premium that she’s been paying for the insurance,” said the woman, identified as Lisa from Harford County, Md. “I’d love for you to elucidate what the Republicans’ plan is for health insurance?”

Harris, a seven-term Republican, didn’t have a clear answer. “We think the solution is to try to do something to make sure all the premiums go down,” he said, predicting Congress would “probably negotiate some off-ramp” later.

His uncertainty reflected a familiar Republican dilemma: Fifteen years after the Affordable Care Act was enacted, the party remains united in criticizing the law but divided on how to move forward. That tension has come into sharp focus during the government shutdown as Democrats seize on rising premiums to pressure Republicans into extending expiring subsidies for the law, often referred to as Obamacare.

President Trump and GOP leaders say they’ll consider extending the enhanced tax credits that otherwise expire at year’s end — but only after Democrats vote to reopen the government. In the meantime, people enrolled in the plans are already being notified of hefty premium increases for 2026.

As town halls fill with frustrated voters and no clear Republican plan emerges, the issue appears to be gaining political strength heading into next year’s midterm elections.

“Premiums are going up whether it gets extended or not,” said GOP Sen. Rick Scott. “Premiums are going up because healthcare costs are going up. Because Obamacare is a disaster.”

‘Concepts of a plan’

At the center of the shutdown — now in its fourth week with no end in sight — is a Democratic demand that Affordable Care Act subsidies passed in 2021 be extended.

Trump has long promised an alternative. “The cost of Obamacare is out of control, plus, it’s not good Healthcare,” he wrote on Truth Social in November 2023. “I’m seriously looking at alternatives.”

Pressed on healthcare during a September 2024 presidential debate, Trump said he had “concepts of a plan.”

But nearly 10 months into his presidency, that plan has yet to come. Dr. Mehmet Oz, administrator of the Centers for Medicare and Medicaid Services, told NBC on Wednesday, “I fully believe the president has a plan,” but didn’t go into details.

Republicans say they want a broader overhaul of the healthcare system, though such a plan would be difficult to advance before next year. Party leaders have not outlined how they’ll handle the expiring tax credits, insisting they won’t negotiate on the issue until Democrats agree to end the shutdown.

A September analysis from the nonpartisan Congressional Budget Office estimated that permanently extending the tax credits would increase the deficit by $350 billion from 2026 to 2035. The number of people with health insurance would rise by 3.8 million in 2035 if the credits are kept, CBO projected.

House Speaker Mike Johnson told a news conference Monday that the tax credits are “subsidizing bad policy.” Republicans “have a long list of ideas” to address healthcare costs, he said, and are “grabbing the best ideas that we’ve had for years to put it on paper and make it work.”

“We believe in the private sector and the free market and individual providers,” he added.

A growing political issue

With notices of premium spikes landing in mailboxes now and the open enrollment period for Affordable Care Act health plans beginning Nov. 1, the political pressure has been evident in Republican town halls.

In Idaho, Rep. Russ Fulcher told concerned callers that “government-provided healthcare is the wrong path” and that “private healthcare is the right path.” In Texas, freshman Rep. Brandon Gill responded to a caller facing a sharp premium increase by saying Republicans are focused on cutting waste, fraud and abuse.

Harris echoed a message shared by many in his party during his Maryland town hall, saying costs are “just going back to what it was like before COVID.”

But the number of people who rely on Affordable Care Act health insurance has increased markedly since before the pandemic. More than 24 million people were enrolled in the marketplace plans in 2025, up from about 11 million in 2020, according to an analysis from the health care research nonprofit KFF.

Sara from Middleville, Mich., told Rep. John Moolenaar during his town hall that if health insurance premiums go up by as much as 75%, most people will probably go without healthcare. “So how do you address that?” she asked.

Moolenaar, who represents a district he handily won last year, responded: “We have time to negotiate, figure out a plan going forward and I think that’s something that could occur.”

Some Republicans have shown urgent concern. In a letter sent to Johnson, a group of 13 battleground House Republicans wrote that the party must “immediately turn our focus to the growing crisis of health care affordability” once the shutdown ends.

“While we did not create this crisis, we now have both the responsibility and the opportunity to address it,” the lawmakers wrote.

Some Republicans dismiss projections that ACA premiums will more than double without the subsidies, calling them exaggerated and arguing the law has fueled fraud and abuse that must be curbed.

Many Democrats credited their ability to flip the House in 2018 during Trump’s first term to the GOP’s attempt at repealing Obamacare, and they’re forecasting a similar outcome this time.

About 4 in 10 U.S. adults say they trust the Democrats to do a better job handling healthcare, compared with about one-quarter who trust the Republicans more, a recent AP-NORC poll found. About one-quarter trust neither party, and about 1 in 10 trust both equally, according to the poll.

A looming internal GOP fight

Even as GOP leaders pledge to discuss ending the subsidies when the government opens, it’s clear that many Republican lawmakers are adamantly opposed to an extension.

“At least among Republicans, there’s a growing sense that just maintaining the status quo is very destructive,” said Brian Blase, the president of Paragon Health Institute and a former health policy advisor to Trump during his first term.

Michael Cannon, director of health policy studies at the libertarian Cato Institute, said he’s working with multiple congressional offices on alternatives that would let the subsidies end. For example, he wants to expand the Affordable Care Act exemption given to U.S. territories to all 50 states and reintroduce a first-term Trump policy that gave Americans access to short-term health insurance plans outside the Affordable Care Act marketplace.

Cannon declined to name the lawmakers he’s working with, but said he hopes they act on his ideas “sooner than later.”

David McIntosh, president of the influential conservative group Club For Growth, told reporters Thursday that the group has “urged the Republicans not to extend those COVID-era subsidies.”

“We have a big spending problem,” McIntosh said.

“I think most people are going to say, OK, I had a great deal during COVID,” he said. “But now it’s back to business as usual, and I should be paying for healthcare.”

Cappelletti and Swenson write for the Associated Press. Swenson reported from New York.