6 States Expand ACA Subsidies To Offset Federal Funds Loss
6 States Expand ACA Subsidies To Offset Loss Of Federal Funds
One of the biggest ongoing policy debates in the federal government has been the extension of COVID-era subsidies for insurance provided through the Affordable Care Act (ACA) marketplace. While Congress is still hemming and hawing about how to address rising health care costs, six states have taken matters into their own hands by expanding state-funded subsidies.
According to CBS News, California, Colorado, Connecticut, Maryland, Massachusetts, and New Mexico are the six states that have expanded their state-funded ACA subsidies. Louise Norris, a health policy analyst for Healthinsurance.org, told CBS News that the states “modified or enhanced their programs directly to address the reduction in federal premium subsidies.”
The longest government shutdown in U.S. history was triggered last fall in an effort to extend the subsidies. Senate Republicans continually refused to negotiate an extension, offering only a vote on their extension. The shutdown ultimately ended with no deal to extend the subsidies. Votes were held on a Democrat plan that would’ve been a clean extension of the subsidies, and a Republican plan that created Health Savings Accounts (HSAs) for people paying for the lowest tier of ACA insurance. Neither plan received the necessary votes, resulting in the subsidies expiring and millions of Americans seeing their health insurance premiums drastically increase.
A combined 10 states offer state-funded subsidies in addition to the now lapsed federal subsidies. Many of those states had already been planning for the federal subsidies to expire and implement plans to offset the rising prices through their State-Based Marketplaces (SBMs). New Mexico, for example, completely offset the cost of the expired subsidies for all residents, including those who recently moved to the state.
“They actually saw a 17% increase in enrollment for 2026, versus 2025,” Norris said of New Mexico. That’s a significant outlier from the national average, as figures from the Centers for Medicare and Medicaid Services (CMS) reveal that ACA enrollment dropped by 1.4 million people in 2026 compared to 2025.
Other states have taken a more targeted, income-based approach to their subsidy extensions. California is only offering to offset the costs of the expired federal subsidies for people who earn up to 150% of the federal poverty level. While California has allocated $190 million to expand the state-based subsidies, that only covers a relatively small portion of the $2.5 billion the state lost with the expiration of the federal subsidies.
Colorado is similarly taking an income-based approach, offering an $80 subsidy for ACA enrollees who make up to 400% of the federal poverty level, with an additional $25 subsidy for each family member they have on their plan.
At the federal level, there has been no meaningful action to address rising health care costs. While the House recently passed a bill for a clean, three-year extension of the subsidies, a bipartisan group of Senators is still trying to iron out their own version of a subsidy extension.
They only had an entire year to come up with a plan, but please, continue taking your time.
President Donald Trump unveiled what he calls the “Great Healthcare Plan” earlier this month, but, as with everything from this administration, it was vague and lacked concrete details on how it would meaningfully lower premiums for ACA enrollees. As it stands, 2026 is going to be a very expensive year for health care for the average American.
SEE ALSO:
House Set To Pass Bill Extending ACA Subsidies For 3 Years
Poll Finds 29% Of Americans Believe Health Care System Is In Crisis
