At least 11 states are offering state-funded premium help to Affordable Care Act (ACA) marketplace enrollees in 2027, with Rhode Island and Virginia debuting new programs, after enhanced federal subsidies lapsed.
The states are California, Colorado, Connecticut, Maryland, Massachusetts, New Mexico, New Jersey, Rhode Island, Vermont, Virginia, and Washington state. Most are continuing policies they started for 2026, and the state funding comes on top of the federal premium tax credits that remain.
States Step In After Lapse
The ACA Marketplace, commonly known as Obamacare, offers subsidized health insurance to people who purchase coverage individually rather than through an employer. Enhanced federal premium tax credits, introduced in 2021 and extended through 2025, expired at the end of that year. State-funded assistance supplements the federal premium tax credits that remain available to eligible enrollees.
KFF, a nonpartisan health policy research group, found that average monthly premium payments rose 58% in 2026, to $178 from $113. The U.S. Department of Health and Human Services published figures in June showing ACA enrollment fell 13% between February 2025 and February 2026, to 19.2 million from 22.1 million.
California raised funding for its Covered California State Subsidy Program to $300 million in 2027 from $190 million. It widened eligibility to households with incomes up to 200% of the federal poverty level, which is $31,920 for an individual or $66,000 for a family of four, from 165% in 2026. That makes an additional 200,000 people eligible, Covered California said in a press release. Massachusetts is investing $620 million, up from $600 million, which state officials said in October is the largest state investment in the country.
New Mexico is the only state fully replacing the enhanced federal subsidies in 2027, according to health policy experts. KFF found that New Mexico’s enrollment grew 14% from 2025 to 2026, while enrollment fell nationally, CNBC reported on Monday.
Enrollment and Funding Questions
Justin Lo, a senior researcher at KFF, said states that offered assistance in 2026 had smaller enrollment declines. Whether states can continue the programs depends on their budgets, said Louise Norris, a health policy analyst at insurance referral site healthinsurance.org, who called funding "the crux of the issue," CNBC reported.
Insurers Seek Higher 2027 Rates
In May, KFF estimated that average ACA marketplace enrollment could fall to about 17.5 million in 2026 from 22.3 million in 2025. People earning 400% to 500% of the federal poverty level lost eligibility for enhanced aid at what is known as the "subsidy cliff." They made up 3% of 2025 enrollment but 27% of the drop in sign-ups, KFF said.
In July, an analysis by the Peterson-KFF Health System Tracker found that insurers offering ACA marketplace plans were seeking a median premium increase of 14% for 2027. If state regulators approve it, that would be the second-highest annual increase since 2018. Insurers said they expect the pool of enrollees to become older and sicker as healthier consumers drop coverage, a shift they estimated would add about 4 percentage points to the increase.
In July, it was reported that in its New York filing, UnitedHealth Group Inc. (UNH) said the expired enhanced subsidies and new enrollment rules accounted for 12.7% of its proposed increase.
If the filings are approved, ACA premiums would have risen by more than 33% between 2025 and 2027, the analysis said.
