WASHINGTON — As Congress faces a Sept. 30 shutdown deadline, health insurers and policy experts warn that the fate of enhanced Affordable Care Act ACA health insurance subsidies could shape the cost and availability of health coverage for millions of Americans. Insurers must finalize 2026 rates within weeks, and uncertainty over federal funding is already influencing pricing strategies.
Projected premium increases
The enhanced subsidies, first expanded under pandemic-era relief measures, currently help about 21 million Americans afford coverage through the ACA health insurance subsidies marketplace. Without congressional action, those subsidies expire Dec. 31. While technically separate from the government funding deadline, the timing matters: insurers are setting premiums for 2026 this fall, and open enrollment begins Nov. 1.
Analysts at KFF estimate that if subsidies lapse, ACA health insurance subsidies enrollees would face out-of-pocket premium increases averaging 74 percent. For a typical middle-income family, monthly premiums could rise by $300 to $400. Health economists warn such increases could cause enrollment declines of up to 3 million people in 2026, as some drop coverage altogether.
“Insurers cannot wait until December to see if Congress acts,” Larry Levitt, executive vice president for health policy at KFF, said. “They need certainty now. If the subsidies aren’t extended, companies will price for a worst-case scenario.”
Some insurers have already signaled they may exit certain state exchanges if subsidy funding lapses, citing risks of market instability. Others could raise rates more aggressively to guard against coverage drop-offs.
How subsidies work?
The ACA health insurance subsidies enhanced expand eligibility for premium tax credits and increase the size of financial assistance available to enrollees. Funded through federal appropriations, they cap premiums at a percentage of household income, making coverage more affordable for low- and middle-income families.
The subsidies were first broadened under the American Rescue Plan in 2021, then extended through 2025 by the Inflation Reduction Act. If they are not renewed, the federal contribution toward premiums would shrink, shifting costs back onto households.
According to federal data, 90 percent of ACA enrollees currently receive some level of subsidy. Policy analysts emphasize that the enhanced version has been critical in stabilizing the individual market by broadening the risk pool and reducing the likelihood of healthier enrollees leaving.
Shutdown risks for health programs
Beyond ACA health insurance subsidies , a government shutdown would directly affect healthcare operations. The Centers for Medicare and Medicaid Services (CMS) would continue to pay benefits, but new regulatory approvals could be delayed. Past shutdowns have slowed work on Medicaid waiver requests, delayed Medicare provider payments, and hampered oversight of insurance plans.
The Department of Health and Human Services (HHS) has warned that furloughs could reduce staff available for ACA call centers and outreach during open enrollment. A prolonged shutdown could also disrupt coordination with insurers, affecting consumer access to information and enrollment assistance.
The White House budget office has gone further, instructing agencies to prepare “reduction in force” plans—permanent job cuts, not just temporary furloughs. If implemented, such cuts could affect staff responsible for enrollment support, compliance monitoring, and public health services. Experts say that would complicate ACA operations and create longer-term challenges for program stability.
Lessons from past shutdowns
Previous shutdowns have offered a preview of what may occur. During the 2013 shutdown, HHS furloughed more than half its staff, slowing grant-making and regulatory reviews. In 2018–2019, CMS continued processing claims but delayed work on new initiatives, leaving state Medicaid programs in limbo.
ACA health insurance subsidies marketplaces themselves have not shut down during past funding lapses, but consumer outreach and assistance suffered, contributing to lower enrollment in some years. Analysts caution that the current situation is riskier, since the subsidy expiration overlaps with the enrollment calendar.
Outlook
Unless lawmakers extend the subsidies before insurers finalize their rates, millions of ACA enrollees could face steep premium hikes for 2026. Industry officials say uncertainty alone drives up costs, as insurers hedge against financial risk.
“The window to act is closing,” said an executive at a national insurance association, speaking in background. “If Congress waits until December, the damage to rates and enrollment will already be done.”
The shutdown deadline is Sept. 30 at midnight. Without an agreement, federal health agencies will reduce operations even as insurers prepare for one of the most uncertain enrollment seasons since the ACA launched.
