Obamacare and Medicare enrollment signs during an “Autumn Alive” community celebration in downtown Quakertown, Pennsylvania, October 17, 2026.
Michael Nagle/Bloomberg via Getty Images
Health insurance in some states is set to become a bit more affordable in 2027.
At least 11 states are offering Obamacare enrollees money to reduce their monthly premiums. Eligible subscribers will need to check this information when applying for insurance during this recruitment season.
The move comes as enhanced federal premium subsidies expire in 2025, raising costs for millions of people who buy health insurance on the Affordable Care Act marketplace. States include California, Colorado, Connecticut, Maryland, Massachusetts, New Mexico, New Jersey, Rhode Island, Vermont, Virginia, and Washington state.
Most states are continuing with the policies they put in place through 2026 due to the loss of federal aid. However, Rhode Island and Virginia plan to launch their programs in 2027, and other states, such as California, have expanded eligibility to additional consumers.
Health policy experts said the state funding could prevent more consumers from dropping their insurance after a significant drop in enrollment this year. It also comes amid a broader affordability crisis for American households that voters cited as the top issue in the recent midterm elections.
Although the enhanced federal premium subsidies expired at the end of 2025, a portion of the federal aid known as the premium tax credit still remains. The funding provided by these 11 states is on top of the federal aid that consumers may receive.
Financial aid amounts vary by state, and each state has different eligibility criteria. Experts say many programs target low-income people.
“This was an effort to make insurance affordable again” for some people, said Louise Norris, a health policy analyst at healthinsurance.org, an insurance referral site. “If you qualify for the assistance that the state provides, that’s certainly important.”
States respond to expiration of enhanced ACA premium subsidies
States that offer additional premium subsidies operate state-based health insurance markets rather than HealthCare.gov. These states are also primarily Democratic-leaning states, health policy experts say.
In 2026, most states provided premium aid to their residents, but Rhode Island and Virginia are new to the list for 2027.
Officials in many states said the move to provide state-funded premium subsidies is a direct response to the expiration of enhanced ACA premium subsidies at the end of 2025.
After the expiration of the enhanced subsidies that took effect in 2021 and pushed ACA enrollment to record highs, Obamacare premiums increased by an average of 58% to $178 per month in 2026, up from $113 a year the previous year, according to KFF, a nonpartisan health policy research group.
Democrats pushed to renew expanded insurance premium subsidies — the core of the 2025 government shutdown that lasted more than a month — but the Republican-led Congress chose not to extend it.
According to numbers released by the U.S. Department of Health and Human Services in June, ACA enrollment fell to 19.2 million as of February 2026, a 13% decrease from 22.1 million in February 2025.
KFF’s analysis shows evidence of further declines in enrollment since then.
Health policy experts primarily attribute the decline to the expiration of enhanced subsidies, as the expiration of subsidies increased costs for consumers.
“Colorado is stepping up where Congress failed,” Gov. Jared Polis said in a September press release about premium subsidies. “Despite the loss of the enhanced premium tax credit, we are doing everything we can to keep health care prices down so Coloradans can access health care.”
Some states will increase funding
New Mexico Governor Michelle Lujan Grisham speaks at a New Mexico Democratic Party convention on November 3, 2022.
Adria Malcolm/Bloomberg via Getty Images
Not all consumers enrolled in ACA Marketplace health plans are eligible for state financial assistance.
New Mexico is the only state among all states to completely replace enhanced federal premium subsidies for the state’s ACA enrollees in 2027 and extend the policy in place through 2026, according to health policy experts.
While ACA enrollment declined nationally in 2026, New Mexico was the only state with an increase in enrollment, increasing 14% from 2025 to 2026, according to KFF.
Some states allocated more funds to premium assistance programs in 2027 compared to 2026.
In California, for example, Democratic Gov. Gavin Newsom and the California Legislature increased the amount of state funds available for the Targeted California Grant Program from $190 million in 2026 to $300 million in 2027, according to a press release about the state’s health insurance market.
Californians with incomes up to 200% of the 2027 federal poverty level ($31,920 for an individual and $66,000 for a family of four) are eligible for state premium subsidies. In 2026, these subsidies will be available to households with incomes up to 165% of the federal poverty line.
As a result of expanded eligibility, an additional 200,000 people who would otherwise not qualify will be eligible for financial assistance in 2026, Covered California, the state marketplace, said in a press release.
California Governor Gavin Newsom speaks to the media while attending the 56th World Economic Forum (WEF) Annual Meeting in Davos, Switzerland, on January 20, 2026.
Dennis Bariboos | Reuters
Massachusetts also increased its investment in financial aid for ACA enrollees from $600 million this year to $620 million in 2027, the largest state investment in the country, state officials announced in October.
Health policy experts say state aid may not be worth much to some consumers, depending on factors such as income and monthly insurance premiums.
For example, in Washington State, ACA enrollees who earn up to 200% of the federal poverty line and receive federal assistance can receive up to $35 a month in subsidies from the state. People with incomes between 201% and 250% of the poverty line could receive up to $20 a month.
Whether states can continue to fund these programs really depends on their budgets.
Louise Norris
Health Policy Analyst at healthinsurance.org
Still, experts say states that offered premium subsidies saw less enrollment decline in the ACA Marketplace than states that didn’t offer financial aid.
“We found that states that provided aid in 2026 had smaller enrollment declines,” said Justin Lo, a senior researcher at KFF who specializes in the Affordable Care Act. “If previous patterns continue, states with more generous subsidies may also see improved enrollment retention.”
Experts say there is no guarantee that states will be able to continue funding these grants into the future.
“Funding is clearly the crux of the issue,” said healthinsurance.org’s Norris. “Whether the state can continue to fund these programs really depends on the state budget.”
