Your health insurance just got 114% more expensive.
That’s not hyperbole. Fortune reports that 24 million Americans receiving Affordable Care Act (ACA) subsidies face premium increases averaging over 100% for 2026 coverage. The cause? ACA subsidies expire January 1, 2026, and the ongoing federal government shutdown means no legislative rescue in sight.
If you’re shopping for 2026 health insurance right now during open enrollment, you’re already seeing the damage. Insurers priced their marketplace plans assuming subsidies disappear. Over half of affected enrollees live in Southern states—specifically Republican-led states that declined Medicaid expansion. Florida, Texas, Georgia, Mississippi, and six other Southern states top the list of subsidy dependence.
Here’s what the subsidy cliff means for your wallet, which states face the biggest hit, and what you can do before coverage starts in January.
Why Are ACA Marketplace Premiums Doubling for 2026?
Insurers don’t gamble on federal policy. When ACA subsidy renewal stalled during the government shutdown, marketplace carriers assumed subsidies would expire as scheduled on December 31, 2025. They priced 2026 premiums accordingly.
Kaiser Family Foundation (KFF) data shows premiums more than doubled on average compared to 2025 rates. That’s because subsidies currently cover 60-80% of premium costs for most enrollees. Remove that federal support and consumers pay full freight.
Consider a typical ACA Silver plan:
| Coverage Year | Full Premium | Subsidy Amount | Your Cost |
|---|---|---|---|
| 2025 | $650/month | $450/month | $200/month |
| 2026 (no subsidy) | $650/month | $0 | $650/month |
Your monthly bill just jumped 225%. Annual cost? $2,400 becomes $7,800. That’s an extra $5,400 out-of-pocket.
Open enrollment started November 1 with these inflated rates already live on HealthCare.gov. Consumers shopping now see sticker shock before clicking “Enroll.”
Which States Face the Biggest Premium Bombs?
Geography determines your pain level. Matthew Martin, senior economist at Oxford Economics, explains the concentration: “Southern states have a much higher share because most of these states did not expand Medicaid coverage in 2010’s ACA or 2021’s American Rescue Plan Act despite federal support to do so.”
Translation: States that rejected Medicaid expansion pushed more low-income residents onto ACA marketplace plans, making them subsidy-dependent. When subsidies vanish, these states absorb maximum impact.
Top 10 states by share of population receiving ACA subsidies:
- Florida: Highest subsidy recipient concentration nationwide. Over 3 million enrollees face premium spikes with no Medicaid safety net for those earning under 138% of federal poverty level.
- Texas: Second-largest ACA marketplace. Declined Medicaid expansion despite covering 1.5 million+ subsidy recipients.
- Georgia: Nearly 700,000 enrollees losing subsidies. No Medicaid expansion fallback.
- Mississippi: Highest uninsured rate pre-ACA, still no Medicaid expansion. Subsidy loss leaves coverage gap.
- South Carolina, Alabama, Tennessee, North Carolina: All rejected Medicaid expansion. Combined subsidy recipients exceed 2 million.
- Utah and Wyoming: Only non-Southern states in top 10, both Republican-led with limited Medicaid programs.
Eight of these ten states voted for Donald Trump in 2024. The political irony? Republican constituents bear heaviest burden from Republican-led subsidy opposition.
The Medicaid Expansion Connection Nobody’s Talking About
Why do Southern states dominate subsidy dependence? Medicaid expansion history.
The ACA originally required all states to expand Medicaid to adults earning up to 138% of the federal poverty level (roughly $20,120 for individuals in 2025). A 2012 Supreme Court ruling made expansion optional. Republican-led states largely declined, creating a coverage gap:
- Earn too much for traditional Medicaid (varies by state, often under $5,000/year for adults without children)
- Can’t afford full-price marketplace plans without subsidies
- ACA subsidies bridge the gap but only if federally funded
States that expanded Medicaid absorbed low-income residents into that program, reducing ACA marketplace reliance. Non-expansion states forced those residents onto subsidized marketplace plans instead.
The 2021 American Rescue Plan offered enhanced federal funding to incentivize late expansion. Most Southern holdouts still refused. Now their residents face premium cliffs while neighboring expansion states offer Medicaid coverage at near-zero cost.
Florida illustrates the divide. Earning $19,000/year in Florida? No Medicaid eligibility. You’re forced onto ACA marketplace with subsidies. Same income in California? Full Medicaid coverage, zero premium.
Government Shutdown Stalemate: Why Subsidies Aren’t Renewed Yet
Congress let ACA subsidies expire before. The current shutdown represents the longest federal closure ever, with subsidy renewal caught in partisan gridlock.
Democrats push subsidy extension. Republicans want expiration. Neither side budges. Meanwhile, consumers shop for January 1 coverage without knowing if subsidies return.
Insurers can’t wait for political resolution. They filed 2026 rates months ago based on “no subsidy” assumptions. Even if Congress extends subsidies retroactively, insurers won’t refund premiums automatically. Consumers pay inflated rates upfront, then navigate refund processes later.
That creates cash flow nightmares for families budgeting monthly expenses. Paying $650/month expecting a $450 refund eventually doesn’t help when rent is due.
What You Can Do Before January 1, 2026
Open enrollment runs through mid-January in most states. You have options, but act fast:
- Check if you qualify for Medicaid now. Income eligibility changed in some states. Visit Medicaid.gov to verify. If you qualify, Medicaid costs far less than any marketplace plan.
- Compare catastrophic plans if you’re under 30. These high-deductible options cost less monthly but cover only major medical expenses. Better than no coverage if subsidies vanish.
- Employer coverage may suddenly make sense. That $400/month employer plan you declined? Cheaper than $650 unsubsidized marketplace premium. Reconsider during your employer’s open enrollment if timing aligns.
- Short-term health plans as temporary bridge. Not ACA-compliant, limited coverage, but far cheaper short-term. Consider 3-6 month policies if you expect subsidy renewal by spring. Risk: Pre-existing conditions often excluded.
- Negotiate payment plans with insurers. Some carriers offer installment arrangements if you can’t afford full upfront premium. Ask before you’re dropped for non-payment.
Document everything. If subsidies return retroactively, you’ll need enrollment proof to claim refunds.
Will Subsidies Get Extended? What Experts Say
Political forecasters give subsidy extension 60-70% odds despite shutdown drama. Why?
Vulnerable Republican senators face constituent blowback in subsidy-dependent states. Florida’s senators, for instance, represent over 3 million subsidy recipients. Letting premiums double before 2026 midterms creates electoral risk.
But timing matters. Subsidies could return by February or March 2026 after consumers already paid January premiums at inflated rates. Retroactive relief doesn’t prevent upfront pain.
Oxford Economics analysis suggests compromise legislation may emerge if shutdown ends before December 15. After that date, insurers lock in rates and refund logistics become administrative nightmares.
Don’t bank on political rescue. Plan for worst case, hope for best case.
Frequently Asked Questions
How much will my ACA premium increase without subsidies?
Most subsidized enrollees face 100-225% premium increases. If you currently pay $200/month with a $450 subsidy, your full premium is likely $650/month—a 225% jump. Exact impact depends on your income, family size, and plan tier. Log into HealthCare.gov to see your specific 2026 rates with and without subsidy assumptions.
Which states refused Medicaid expansion and why does it matter?
Ten states still haven’t expanded Medicaid: Florida, Texas, Georgia, Mississippi, Alabama, South Carolina, Tennessee, Kansas, Wisconsin, and Wyoming. This matters because residents earning between traditional Medicaid limits and 138% of federal poverty level ($20,120 for individuals) have no affordable coverage option if ACA subsidies end. They earn too much for Medicaid but can’t afford full-price marketplace plans. Expansion states cover this population through Medicaid at minimal or zero cost.
What happens if subsidies end mid-year after I enroll?
If you enroll for 2026 and Congress lets subsidies expire January 1 as scheduled, you’re responsible for full monthly premiums starting immediately. Insurers won’t wait for political resolution. However, if subsidies get extended retroactively (say, by March 2026), you can file for refunds through the marketplace. Keep all payment records and correspondence. Processing refunds typically takes 8-12 weeks once legislation passes. Budget for full premium payments until refunds actually arrive.
Should I skip health insurance if subsidies end?
Going uninsured is risky even without mandate penalties. One hospital stay costs $15,000–$50,000+ on average. Emergency room visits run $1,500–$3,000. Uninsured patients pay full charges without negotiated insurance discounts. If you absolutely can’t afford marketplace plans, explore these alternatives: catastrophic coverage (under 30), short-term plans (limited coverage but cheaper), direct primary care memberships (preventive care only, around $100/month), or community health centers offering sliding-scale fees based on income. Check HRSA’s health center finder for locations near you.
When does open enrollment end for 2026 ACA coverage?
Federal marketplace open enrollment ends January 15, 2026 for coverage starting January 1. However, if you enroll by December 15, 2025, coverage begins January 1. Enroll December 16-January 15 and coverage starts February 1. Some states running their own exchanges (California, New York, etc.) extend deadlines further. Check your state’s marketplace for specific dates. Miss the deadline and you’re uninsured until next year unless you qualify for a Special Enrollment Period due to life changes like job loss, marriage, or having a baby.
Bottom Line: Don’t Wait on Washington
The government shutdown might end tomorrow or drag into 2026. Subsidies might return or vanish permanently. You can’t control Congress.
You can control your enrollment decisions. Compare plans now. Calculate worst-case premium costs. Explore Medicaid eligibility even if you didn’t qualify before. Consider employer coverage you previously rejected.
24 million Americans face this same calculation. The difference? You’re reading this before January 1. Most people won’t realize premiums doubled until they get the first bill.
Open enrollment closes mid-January. Act while you still have choices.