How the showdown over Obamacare subsidies could hit Mass. consumers' wallets

For months, Democrats and Republicans in Washington, D.C., have been fighting over subsidies that make health insurance more affordable. This policy debate is at the center of the federal government shutdown. And now the implications of the debate are becoming real for millions of Americans.

People across the country have begun shopping for health insurance plans for 2026. And while costs are ticking up for everyone, those who get their coverage through a state exchange, such as the Massachusetts Health Connector, are facing extraordinary price increases.

More than 337,000 people in Massachusetts who get coverage on the Connector are losing a significant chunk of the help they received from the federal government because it expires at the end of this year. And 26,000 of those residents will no longer qualify for any subsidies in 2026, according to the Connector.

As a result, many will see premium rates more than double.

Here’s one hypothetical example of what this looks like: A 62-year-old couple living in Watertown and earning $86,000 per year will pay $1,741 more per month for the same plan next year. That comes out to a total premium bill of $3,134 per month.

“This will cause real financial pain for individuals and families across the commonwealth,” said Alex Sheff, senior director of policy and government relations at Health Care For All, a Boston-based advocacy group.

The people affected by these cost hikes include families and individuals who don’t receive Medicaid or Medicare coverage but still need help affording insurance. Connector members also include people who are self-employed and others who don’t get their coverage at work.

Health policy advocates worry that premium hikes will push many Americans to drop their health coverage altogether, putting themselves at risk of big medical bills if they become ill or injured. (In Massachusetts, residents who are uninsured may have to pay a penalty, but the fine tends to be cheaper than the price of coverage.)

Some people might opt for plans that have smaller price increases — but come with less generous benefits.

“We are worried,” Sheff said, “that a lot of people will potentially forego coverage, or get coverage that doesn't cover as much, and they'll skip picking up the medication that they're supposed to pick up, or not go to that specialist appointment they should go to, because they can't afford it.”

The subsidies in question, known as enhanced premium tax credits, were put into place during the COVID-19 pandemic and set to expire at the end of this year. Democrats have been pushing Republicans — who have the majority in Congress — to extend the subsidies. Republicans argue the tax credits were meant to be temporary, and that any discussion about making health care affordable should happen outside of negotiations to reopen the government. So far, there’s no deal in sight.

It’s worth noting that in Massachusetts, the federal and state governments will still discount the price of insurance for lower-income residents next year — but the amount of help will be smaller.

Massachusetts residents shopping for health plans have until Dec. 23 to select a plan and make a payment for coverage beginning Jan. 1. If Congress decides to extend subsidies, Audrey Morse Gasteier, executive director of the Health Connector, told me the agency is ready to pivot.

Gasteier said she and her staff “stand ready to move mountains if Congress does take action, in order to get that help into the hands of the public as soon as possible.”