November 1, 2025 in Northglenn, Colo., on the first day of ACA public enrollment.Coloradoans will fill out a card and share their stories about what they will send to their legislators about lowering health care costs.
Tom Cooper | Getty Images Entertainment | Getty Images
Some states are stepping in to cushion the fiscal impact of the expiration of federal subsidies for health insurance premiums from the Affordable Care Act.
California, Colorado, Connecticut, Maryland, Massachusetts and New Mexico began offering additional state-funded premium subsidies in 2026 to prevent premiums from becoming unaffordable for many residents after enhanced federal aid expires at the end of 2025, experts said.
In most cases, state aid is less generous than the federal aid that has expired, he said.
But experts said state subsidies would help many consumers, especially those with low incomes, and reduce the number of households that lose coverage.
“They’re softening the blow,” said Louise Norris, a health policy analyst at healthinsurance.org, an insurance referral site.
About 2.6 million people in California, Colorado, Connecticut, Maryland, Massachusetts and New Mexico will receive enhanced federal premium subsidies in 2025, and about 12% of all consumers nationwide will receive subsidies, according to federal data tracked by KFF, a nonpartisan health policy research group.
Blue states offer ACA subsidies
On October 26, 2017, an insurance store sign in San Diego, California advertises Obamacare.
Mike Blake | Reuters
Experts said the maneuver could deepen political rifts over the issue of health insurance subsidies.
Democrats on Capitol Hill have pushed to extend expired federal aid, even focusing on the issue and the record-long government shutdown. So far, the Republican majority has blocked their efforts.
Matt McGaugh, Affordable Care Act policy analyst at KFF, said states in the blue are those that have opted to provide additional premium aid to their residents.
Still, only “a handful” do so, he says.
Red states like Texas and Florida have seen by far the largest growth in ACA enrollment since enhanced federal subsidies went into effect in 2021, and many of those consumers will stop enrolling in insurance now that the federal subsidies end, McGough said.
In 2025, about 4.5 million people in Florida and 3.7 million people in Texas received premium subsidies, also known as premium tax credits, according to an analysis of federal data by KFF.
Enrollees in both states accounted for more than one-third of the roughly 22 million Americans who received premium subsidies that year.
By comparison, in California, the most populous state in the United States, 1.8 million people received premium tax credits last year.
The partisan divide on ACA subsidies comes in a midterm election year, when Republicans are trying to maintain a slim majority in the House and affordability has become a key focus for politicians and consumers.
Financial impact of expiration of ACA enhanced subsidy
According to KFF, premiums for the average person who received premium tax credits last year are expected to more than double from $888 to $1,904 per month in 2026 as enhanced federal subsidies expire.
The enhancement of subsidies started in 2021. The subsidies were built on the original framework for premium tax credits that had been available since 2014, during the early days of the Affordable Care Act, also known as Obamacare.
The original portion of the federal grant remains in place. We are working in phases to provide more support to low-income families.
However, these are not as valuable as the enhanced premium tax credit. Due to enhanced subsidies, households’ out-of-pocket costs were limited to 8.5% of their annual income. Now that cap has increased to about 10%.
Additionally, the return of the so-called subsidy cliff has made some households ineligible for premium tax credits.
Specifically, the enhanced subsidies mean that middle-income households earning at least 400 percent of the federal poverty level (about $63,000 for a single person and $129,000 for a family of four) can now qualify for premium tax credits for the first time.
Now they are disqualified again.
The federal government will use the 2025 Poverty Guidelines to determine income eligibility in 2026.
What countries are doing to close the gap
November 1, 2025, healthcare.gov website on a laptop located in Norfolk, Virginia.
Stephanie Reynolds | Bloomberg | Getty Images
Before the enhanced federal subsidies expired, states like Washington, New York, Connecticut, Vermont, Massachusetts and New Jersey were already offering additional state aid on top of the federal premium tax credit to make health insurance more affordable, McGough said.
They remain in place, he said.
Other states have taken steps to increase funding, especially as enhanced federal aid expires.
new mexico
New Mexico is the only state to completely replace enhanced federal aid for its residents, experts say.
“They backfilled everything,” Norris said. “No one wasted the grant money in New Mexico. As a result, enrollment really increased.”
State-level data shows ACA enrollment is up about 17% in 2026 from the previous year, a momentum that bucks national trends, Norris said.
About 1.5 million U.S. households had already lost their insurance coverage by early January, according to federal data. The Urban Research Institute estimates that by 2026, nearly 5 million people will end up losing their medical insurance and become uninsured due to the expiration of subsidies.
The New Mexico Legislature has proposed funding through June 30. Democratic Gov. Michelle Lujan Grisham has called for an extension beyond June 30 if Congress does not enact additional funding.
connecticut
Norris said only Connecticut is moving to replace at least some of its expiring subsidies for people with incomes above 400 percent of the federal poverty line, a group of consumers who have fallen off the federal aid cliff.
According to Access Health CT, the state’s health insurance marketplace, Connecticut plans to replace half of the expired subsidies for people with incomes between 400% and 500% of the federal poverty level. This equates to approximately $63,000 to $78,000 per person, for example.
Connecticut will also fully fund the expiring enhanced subsidies for households with incomes between 100% and 200% of the federal poverty level, or $15,650 to about $31,000.
Norris said the state is targeting consumers “particularly hard hit” by the expiration of the subsidy.
For example, the average household with incomes above 400% of the federal poverty line is expected to see annual ACA health insurance premiums jump from $4,400 to about $8,500 in 2026, according to the Urban Institute.
Massachusetts
Massachusetts Governor Maura Healey addresses the nation while surrounded by Texas state legislators during a press conference at the Massachusetts State Capitol on August 5, 2025.
Ben Pennington | Boston Globe | Getty Images
Massachusetts will invest an additional $250 million in the state’s health insurance marketplace, called ConnectorCare, for 2026, bringing the total to $600 million, according to a Jan. 8 press release issued by Gov. Maura Healey and Lt. Gov. Kim Driscoll.
The release said the funding comes from the Commonwealth Care Trust Fund, a special revenue fund for state spending.
The investment means approximately 270,000 consumers with incomes below 400% of the federal poverty line will see “little or no premium increases due to the expiration of federal credits,” according to the release.
The state also for the first time capped medical deductibles and copays, as well as the cost of insulin and inhalers.
Separately, Massachusetts previously established a pilot program that offered state premium subsidies to people who earn up to 500 percent of the federal poverty line, Norris said. The state has extended that program through 2026.
maryland
Experts say other states are also taking steps to cushion the impact, primarily on low-income households.
For example, Maryland’s state subsidy program would completely replace the enhanced federal premium subsidy for people below 200% of the federal poverty level, according to the Maryland Department of Insurance.
It would also replace half of the expired federal aid for people between 250% and 400% of the federal poverty level.
California
Smith Collection/Gado | Archive Photos | Getty Images
California has allocated $190 million in 2026 to provide state subsidies to people with incomes up to 150% of the federal poverty level, according to Covered California, the state’s health insurance marketplace.
That amount would ensure “monthly premiums are comparable to 2025 levels” for people with incomes of about $23,500 for individuals and $48,000 for families of four, according to Covered California.
They soften the blow.
Louise Norris
Health Policy Analyst at healthinsurance.org
But Norris said the $190 million will only make up for a small portion of the $2.5 billion Californians will lose in 2026 when enhanced federal aid expires.
California also provides “some additional assistance” to people earning up to 165% of the federal poverty level, according to the state marketplace.
colorado
Colorado plans to provide up to $80 a month to individual enrollees in 2026, and then an additional $29 to family members who pay premiums, McGough said.
Premium subsidies are available to households earning between 100% and 400% of the federal poverty level.
McGough said the plan would replace about 40% of lost federal aid.
