FILE PHOTO: Signs for former Obamacare health insurance plans lay next to a fence in Columbia, South Carolina, U.S., January 28, 2023. REUTERS/Shannon Stapleton/File Photo
FILE PHOTO: U.S. President Joe Biden signs an executive order “continuing to strengthen Americans’ access to affordable, quality health coverage” after Biden, former U.S. President Barack Obama and Vice President Kamala Harris all spoke about the Affordable Care Act and Medicaid at the White House in Washington, U.S., April 5, 2022. REUTERS/Leah Millis/File Photo

By Amina Niasse

NEW YORK (Reuters) -Officials from several U.S. states say Americans relying on subsidies to afford Obamacare health insurance are holding off on enrolling as they face 2026 premium hikes that could more than double, with one state seeing enrollment drag by as much as 33%.

Of more than a dozen states that directly sell to their residents plans established under the Affordable Care Act - often called Obamacare - seven including California and Maryland told Reuters sign-ups are lagging compared to a year ago.

There is still time for enrollment to pick up, some said, with the next few weeks seen as crucial. A December vote in the U.S. Senate – should it happen – could still be an 11th-hour rescue for the program's subsidies. Other major changes would be difficult to implement for next year, experts say.

Big wins by Democrats in November have put healthcare back in the forefront of U.S. politics and left Republicans scrambling to address the issue before next year's mid-term elections that will decide control of Congress. President Donald Trump had said he supported giving funds directly to consumers, evading health insurance companies, but may be mulling alternatives.

Politico reported on Monday that Trump was considering a two-year extension of the subsidies.

"People are making really tough choices to figure out how they can stay covered or making the tough choice to drop," said Ingrid Ulrey, chief executive officer for Washington Health Benefit Exchange.

Ulrey said 7,000 people in Washington state have dropped coverage since the start of the sign-up period, a 21% year-over-year increase in disenrollments.

The Department of Health and Human Services did not respond to a request for comment.

PARING BACK, SEEKING ALTERNATIVES

Some consumers are paring back to alternatives like the short-term coverage plans that were designed to be used for emergency healthcare, or by signing up for co-funded health-sharing arrangements managed by faith-based groups, some officials and brokers said.

A spokesperson for Covered California said enrollment is down 33% from the sign-up period last year. Pennsylvania said it has seen a 12% decrease in new enrollees from 2025 to 2026, and for every one new enrollment, two existing enrollees have terminated coverage. Virginia, Maryland, Rhode Island and Connecticut all described a weaker pace of sign-ups.

About 24 million people signed up for the plans in 2025, with about 22 million receiving income-based subsidies. Enhanced tax credits for households making above 400% of the federal poverty level were introduced in 2021, during the COVID-19 pandemic, and are set to expire at the end of 2025.

Health research firm KFF estimates premiums will more than double, particularly for those people at the top of the scale.

Ulrey said Washington's active enrollment drops were largely made up of families earning an average of $107,000 a year.

The plans aimed to increase access to healthcare in the U.S. by drawing insurers into a stable market. Insurers who offer the plans had already been expecting a difficult 2026 due to rising medical costs and shrinking enrollment.

CVS Health's Aetna announced in May it would exit the business entirely. UnitedHealthcare said it would trim its Obamacare offerings in less favorable markets, while Centene and Cigna have signaled potential rate adjustments tied to the expiration of the subsidies.

STATES AWAIT LAWMAKERS' DECISIONS

Lindsay Lang, director at Health Source RI, said an increased number of residents have canceled appointments with state employees who help shoppers navigate the marketplace.

"If there is going to be a vote in Congress, it would occur in December, and that's truly the 11th Hour," Lang said.

If lawmakers directly extend subsidies at the current amount, implementing that retroactively would be manageable for states, two officials and three industry experts said.

"That is relatively simple for us to do in our system," said Rhode Island's Lang.

Michele Eberle, executive director at Maryland Health Benefit Exchange, said rolling out Republican suggestions of direct subsidies and other changes to the framework of the tax credits would require documentation, new technology and system testing that could not be carried out in time for next year.

"I don't think any exchange, including the federal exchange, can make systematic changes that quickly," Eberle said.

Whitney Stidom, an executive with health insurance marketplace eHealth, said short-term and indemnity plans that reimburse buyers a fixed amount are often the next option for people willing to forgo comprehensive health coverage, but they don't cover pre-existing conditions.

People shopping for cheaper plans may not know that short-term coverage or health ministry plans often do not pay for essential health benefits, such as maternity care, mental health services or preventive care, said Michelle Long, senior policy manager at KFF.

“It's not health insurance,” she said.

(Reporting by Amina Niasse in New York; Editing by Caroline Humer and Bill Berkrot)