Across the United States, six states are intensifying efforts to mitigate the rising costs of Affordable Care Act (ACA) plans, following a recent lapse in federal funding that has left millions grappling with increased premiums. California, Colorado, Connecticut, Maryland, Massachusetts, and New Mexico are notably enhancing their state-funded ACA subsidies for 2026, responding to the expiration of federal tax credits at the end of the previous year, according to Louise Norris, a health policy analyst at Healthinsurance.org.
These states have adapted their programs specifically to counteract the reductions in federal premium subsidies. Currently, 10 states nationwide provide extra subsidies in addition to the federal ACA tax credits. The ongoing debate in Congress concerning the fate of these federal credits has yet to yield a resolution, leaving many ACA enrollees with escalating premium costs. The open enrollment period for Obamacare wrapped up on January 15 in most states.
Data from the nonprofit health group KFF indicates that many states, particularly those utilizing State-Based Marketplaces (SBMs), have been proactive in preparing for the loss of ACA tax credits. For instance, New Mexico opted to fully replace the lost federal tax credits for all residents, including recent immigrants, leading to a substantial 17% increase in enrollment for 2026 compared to the previous year.
Conversely, nationwide enrollment in ACA coverage has sharply declined in recent months, as reported by the Centers for Medicare and Medicaid Services. Several states are opting for a more targeted approach to aid ACA enrollees, basing assistance on household income levels. In California, for example, state subsidies are allocated to those earning up to 150% of the federal poverty level, though this measure only partially offsets the $2.5 billion the state anticipates losing in federal assistance.
Colorado is implementing a subsidy for ACA participants who make up to 400% of the federal poverty level, providing $80 to help offset monthly premiums and an additional $29 for each family member covered in the plan. States that provide their own subsidies must operate independent exchanges separate from HealthCare.gov, due to the federal portal’s inability to calculate additional subsidies beyond the federal level.
In total, 20 states run their own exchanges, predominantly in Democratic-controlled regions. States lacking their own exchanges can still offer ACA subsidies but through different mechanisms. As concerns about healthcare costs rise, the Trump administration is exploring ways to alleviate the financial burden. Recently, President Trump announced what is termed the “Great Healthcare Plan,” which aims to direct funds straight to citizens to purchase their own healthcare, asserting that this approach would benefit the public while diminishing the power of large insurance companies.
