Several states increase ACA subsidies as federal tax credits end.

States Boost Assistance for ACA Plans Amid Federal Aid Cuts

Six states are stepping up efforts to help ease the financial burdens associated with Affordable Care Act (ACA) plans. With the lapse of federal funding, many Americans are facing increasing insurance premiums.

California, Colorado, Connecticut, Maryland, Massachusetts, and New Mexico have all raised their state ACA subsidies for 2026, reacting to the end of federal support last year, as noted by Louise Norris, a health policy analyst at Healthinsurance.org.

Norris explained that these states have “modified or strengthened their programs to directly address reductions in federal premium subsidies.” In total, 10 states across the nation provide additional subsidies on top of the federal ACA tax credit.

Congress has been in discussions about the future of these federal tax credits for months, but no agreement has been reached so far. In the meantime, some individuals enrolled in ACA plans are seeing their premiums soar. The public application system for Obamacare wrapped up on January 15th in most states.

According to a report from KFF, many states, particularly those with state-based marketplaces (SBMs), have been preparing for the end of ACA tax credits for quite some time. Notably, New Mexico has opted to completely offset the loss of federal tax credits for all residents, including recent immigrants.

“In fact, enrollment in 2026 was up 17% compared to 2025,” Norris mentioned regarding New Mexico.

Across the nation, enrollment in ACA coverage has significantly declined in recent months, as reported by the Centers for Medicare and Medicaid Services.

Other states have chosen a more targeted approach by providing assistance based on household income. For instance, California addresses the loss of premium tax credits, but only for ACA enrollees with incomes up to 150% of the federal poverty level. This move aims to mitigate some of the $2.5 billion the state has lost in federal tax credit support.

Colorado is also stepping in, offering ACA enrollees with incomes up to 400% of the federal poverty level an $80 subsidy to help with monthly premiums, in addition to $29 for each family member covered by the plan.

States that provide their own subsidies directly to ACA enrollees typically operate their own exchanges separate from HealthCare.gov, which is the primary platform for Americans enrolling in Obamacare. This is because the federal portal isn’t equipped to process additional tax subsidies beyond what is already available federally, Norris explained.

A total of 20 states manage their own exchanges, most of which are in Democratic-led areas. Norris pointed out that states without their own exchanges can still provide ACA subsidies, but they would need to utilize a different method.

As concerns about healthcare costs continue to mount, the Trump administration is also exploring ways to alleviate the situation. Recently, President Trump announced what the White House is labeling the “Great Health Care Plan,” which includes proposals for direct financial support to Americans.