Obamacare premiums could more than double. Here’s why it matters in the shutdown battle

By Tami Luhby, Annette Choi, CNN

(CNN) — Obamacare has brought the federal government to a standstill.

Once again, Republicans and Democrats are locked in a battle over the landmark health reform law. But this time it has prevented lawmakers from passing legislation to fund federal agencies for the current fiscal year, forcing the government to shut down on October 1.

At the center of the conflict are the enhanced Affordable Care Act subsides that help Americans pay their monthly premiums.

Let us explain what’s going on:

What are the enhanced subsidies?

When Democrats took full control of Congress in 2021, they beefed up Obamacare’s existing premium subsidies as part of former President Joe Biden’s sweeping Covid-19 pandemic relief package and then renewed the enhancement the following year.

The measure enables many lower-income Americans to obtain coverage with no or very low monthly premiums and broadens eligibility for assistance to many middle-class consumers.

The enhanced subsidies helped propel Obamacare to record enrollment levels. More than 24 million people signed up for 2025 coverage, double the number who selected plans for 2021, before the subsidies kicked in. Roughly 92% of enrollees receive subsidies.

Why is Congress fighting about the enhanced subsidies now?

The beefed-up subsidies are set to expire at the end of this year.

Democratic lawmakers want to lock in an extension as part of a must-pass government funding package, which they see as their best chance to get the Republican majority in Congress to agree to renewing the measure. (The Democrats also want to reverse the sweeping health care cuts enacted in the GOP’s One Big Beautiful Bill Act this summer.)

In addition, Democrats and Obamacare advocates stress that time is of the essence. Open enrollment begins November 1 in all states but Idaho (where it starts October 15). Consumers will be able to start viewing the 2026 premiums this month, and many could be deterred from signing up by the much bigger price tags.

Republicans, on the other hand, are pushing a so-called “clean continuing resolution” that would fund the federal government through November 21. The House approved the legislation last month, but it is being held up in the Senate, where at least seven Democrats need to support the bill for it to pass.

GOP leaders and President Donald Trump say they are willing to discuss extending the subsidies but only after the government reopens. Even then, however, they’ll have to convince some Republican lawmakers who have long sought to dismantle Obamacare to come to the law’s aid. Republicans have also expressed concern that the enhanced subsidies led to an outbreak of enrollment fraud.

Neither side appears to be budging from its position.

What happens if the enhanced subsidies expire?

If the beefed up assistance lapses, annual premiums for subsidized enrollees are expected to skyrocket by an average of 114%, from $888 this year to $1,904 next year, according to KFF, a nonpartisan health policy research organization.

The latest state-by-state analysis available — a KFF report on 2024 data — showed that a dozen states would see premiums at least double.

Two other factors are also pushing up the premiums that enrollees will have to pay. The Trump administration enacted a rule that changes the way the Affordable Care Act’s standard subsidies will be calculated next year. Plus, insurers are hiking their rates by the largest amount since 2018 because of rising health care costs and the expiration of the enhanced subsidies, which is expected to lead to an exodus of healthier and less expensive policyholders.

The difference in annual payments will be substantial for many enrollees, according to KFF.

For instance, a 60-year-old couple making $85,000 would have to shell out over $22,600 more for annual coverage next year, on average, or about a quarter of their annual income. And a 45-year-old earning $20,000 who lives in a state that didn’t expand Medicaid would go from paying $0 to $420 a year for a benchmark plan, on average.

Many consumers are now receiving notices from their insurance companies and exchanges about open enrollment for 2026, with some warning that premiums could rise if Congress doesn’t renew the enhanced subsidies, which are also known as premium tax credits. People can view the 2026 plan choices — and premiums — once window shopping opens, which is mid-October for the roughly 30 states that use the federal exchange, healthcare.gov.

How much would it cost to extend the more generous subsidies?

Making the enhanced subsidies permanent would cost $350 billion over a decade, according to the Congressional Budget Office.

How many people will lose health insurance if the enhanced subsidies expire?

About 2 million fewer Americans will be insured next year if the subsidies expire, according to a CBO analysis. By 2035, 3.8 million fewer people will have health insurance in 2035 if the subsidies expire, CBO says.

Residents of many red states will likely be hit disproportionately hard if the enhanced subsidies end. More than half of those who will become newly uninsured live in Texas, Florida, Georgia and North Carolina, according to a KFF analysis.

That’s because many Southern red states saw the largest growth in enrollment after the enhancement was enacted, in part because many have not expanded Medicaid to their low-income residents.

Is it too late to change the premiums if Congress passes an extension later this year?

Some insurers and Obamacare exchanges have said they will do all they can to update their rates and systems so that the monthly premiums are adjusted to reflect the extension, if and when that happens.

Centers for Medicare and Medicaid Services Administrator Mehmet Oz said at an Aspen Institute event Monday that “there are things CMS can do to make sure that the out-of-pocket expense of Americans is not impacted in accordance (with) whatever legislation is ultimately passed.”

But advocates worry that existing enrollees and those newly shopping for coverage will suffer sticker shock if they view the premiums before Congress acts and won’t return to select plans if lawmakers end up extending the subsidies.

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