Enhanced ACA premium tax credits expire Dec. 31, leaving millions of marketplace enrollees facing higher premiums in 2026. Congressional efforts to extend the subsidies have stalled, with neither a Democratic three-year extension proposal nor a Republican alternative focused on HSAs passing the Senate. A House vote on extending the subsidies could still happen in early January.
A handful of states have taken action recently to mitigate the impact, though none can fully replace the federal funding in the long term. Here’s what they’re doing:
New Mexico: The only state fully replacing the expired subsidies for 2026 with $17 million in enhanced premium and cost-sharing assistance for individuals and families purchasing coverage through the state’s exchange.
California: Allocating $190 million to replace subsidies for individuals earning up to 165% of the federal poverty level in 2026. The state’s remaining 2 million exchange enrollees will see higher costs, and Covered California projects up to 400,000 people could become uninsured.
Maryland: For 2026, state subsidies will replace the subsidies for people under 200% of the federal poverty level. For those between 201% and up to 400%, the state will replace 50% of the subsidies.
Colorado: Passed legislation to reduce 2026 premium increases through an allocation of up to $100 million in funds to stabilize its individual market.
Connecticut: Committed $70 million to offset the expiring subsidies for 2026. Individuals earning up to $56,000 and families of four earning up to $128,000 will see little to no change in costs.
Arkansas, Texas, Wyoming: Implemented “premium alignment,” a regulatory tactic that shifts costs to ensure remaining federal subsidies reach more people and keep out-of-pocket costs from rising, according to Politico.
