Americans facing soaring health insurance costs may get a lifeline in 2026, experts say

Political pressure to prompt Obamacare credit extension, investors say Enrollment period may extend if subsidies are retroactively enacted, experts say Premium hikes lead to enrollment drop, insurers prepare for subsidy lapse By Amina Niasse and Ahmed Aboulenein NEW YORK/WASHINGTON, Dec 18 (Reuters) - Americans facing skyrocketing Obamacare health insurance premiums could still get a break from expanded government subsidies in 2026 through retroactive legislation and possibly a special enrollment period, investors, analysts and industry experts say. President Donald Trump and the Republican Party have been divided for months on a replacement for the Affordable Care Act’s extra COVID-era subsidies that have made insurance more affordable for most of the 24 million Americans who rely on the government-backed plans. Republicans have been promising an ACA alternative for over a decade, but have yet to produce one with a passable consensus that maintains consumer protections of Obamacare plans Two U.S. Senate votes aimed at addressing the issue failed to pass last week, and a plan in the U.S. House of Representatives is unlikely to advance. Without a deal, millions of Americans must now weigh whether to sign up and be prepared to pay much higher prices or go without health insurance. Total premium costs for subsidized Obamacare enrollees are expected to increase to an average $1,904 for 2026 from $888 in 2025. Investors are still hoping for an eventual deal in 2026, with shares of health insurers including Centene (CNC.N) , UnitedHealth (UNH.N) and Elevance (ELV.N) all up since the beginning of December, even as chances of an 11th-hour Congressional action fade. “There’s no absolute drop-dead date for extending the ACA enhanced premium subsidies. ACA enrollees would welcome premium relief whenever it comes,” said Larry Levitt, health policy executive at health research firm KFF. SPECIAL ENROLLMENT PERIOD Obamacare plan enrollment opened in November and closes on January 15. If a deal were reached after that, it could include a retroactive extension of the subsidies and new sign-ups or a special enrollment period could be added, reflecting the lowered costs, said Levitt and Daniel Barasa, a portfolio manager at investment firm Gabelli, which owns Cigna shares. Insurers have been preparing for the lapse of the credits, structuring 2025 plans as if they will expire, and raising premiums, which KFF said could more than double for many. The expanded subsidies apply to households making more than 400% of the federal poverty level. “We’re going into an election year where affordability is” the main issue facing Trump and fellow Republicans looking to maintain control of Congress, said Kevin Gade, chief operating officer at investment firm Bahl & Gaynor, which owns UnitedHealth shares. Gade, Barasa, and James Harlow, a senior vice president at Novare Capital Management, which owns UnitedHealth shares, said there will be increased political pressure on Congress to deliver a solution as more time passes. ENROLLMENT DROPPING The shock of increased premiums is already pushing shoppers to drop coverage, said KFF’s Levitt. KFF data shows most people enroll in the early weeks after the marketplace opens. Historical U.S. data shows a separate surge in early January for Obamacare sign-ups. A December KFF survey showed 25% of Obamacare marketplace enrollees say they will likely go without insurance next year if premiums double for their current plans. UnitedHealth has said it expects ACA enrollment to be reduced by about two-thirds. Consumers who don’t select a new plan during open enrollment are typically auto-reenrolled. Healthcare.gov will keep them in the same plan if it remains available or move them to a similar option from the same insurer if their current plan has been discontinued. A spokesperson for a national health insurer said the company is increasingly engaging with consumers to make them aware of auto-renewals that may subject them to plans they cannot afford and reduce confusion for shoppers navigating premium increases. Government data released in December shows that 13.4% of people who signed up for 2025 plans in states that directly sell them to residents have renewed their plans. Renewal figures were at 13.9% during the same time last year. Morningstar analyst Julie Utterback said concerns the insurers will end up with mostly sick members as healthy ones forego insurance may be overstated. Three states operating their own exchanges told Reuters they continue to see lagging sign-ups compared to the year prior, with Washington and Pennsylvania saying new sign-ups were down 16% and California seeing a 33% decrease from last year.