Open enrollment's Nov. 1 start looms over Obamacare subsidies debate in Congress

Congressional Democrats and Republicans are at an impasse on negotiating an extension of enhanced Obamacare premium subsidies during the government shutdown, but they agree on one thing: Time to act is running out.

Obamacare open enrollment begins Nov. 1 in most states, and many have sent notices informing consumers they will have to pay more out of pocket for their premiums next year.

Congress still has an opportunity to act, but lawmakers don’t have much time left to approve government support for Americans to buy health insurance for 2026.

“What’s the drop-dead date? Nobody really knows,” Sen. Tina Smith, Minnesota Democrat, told The Washington Times. “But Nov. 1 is a pretty important one.”

Ms. Smith said the ultimate answer depends on whether lawmakers simply extend or alter the enhanced subsidies and how quickly insurance companies and federal and state exchange managers can respond.

“The problem is that there’s people who are out there looking at rates right now and going, ‘Holy smokes, I can’t afford that.’ And then they might never go back to see if those rates are lower once everything is done,” she said. “So there’s a cumulative effect of driving people away, I think, from buying insurance.”

Democrats are refusing to vote to reopen the government unless Republicans agree to extend the COVID enhancements to the Obamacare subsidies, which don’t technically expire until Dec. 31.

Republicans say that’s extortion and won’t negotiate during the shutdown.

“This is an incredible catch-22,” said Sen. Bill Cassidy, Louisiana Republican, accusing Democrats of “tomfoolery.”

Mr. Cassidy, who chairs one of two Senate committees with jurisdiction over health care policy, would like to have a broader negotiation about lowering costs, “not just paper over them with subsidies.”

The COVID enhancements provided an across-the-board boost in the portion of Obamacare insurance premiums that the government will subsidize, capping out-of-pocket costs at 8% of household income.

The pandemic expansion also allowed families earning above 400% of the federal poverty level to access the subsidies for the first time. In 2025, individuals with annual income above $62,600 or families of four earning $128,600 or more a year would be eligible.

The roughly 22 million Americans on subsidized Obamacare plans could pay more than double for premiums in 2026 — 114% more, on average, according to nonprofit health policy research organization KFF — if the COVID enhancements expire.

The subsidies help offset what consumers pay for premiums set by health insurers.

The Centers for Medicare & Medicaid Services finalized the gross rates insurers submitted for regulatory approval Friday, and they are highly unlikely to make further adjustments this late in the year, a health insurance industry source told The Times.

If Congress extends the subsidies, it will lower net premiums for most people purchasing Obamacare, but Republicans want to enact “reforms” to the program, increasing the likelihood that nothing will be done before Nov. 1.

“This is where I have concern as every day passes, where we have not addressed that because the numbers are done,” said Sen. Lisa Murkowski, Alaska Republican. “All that’s left is to have them be posted, and then individuals see what it’s going to mean for them and their family.”

“They’re going to have to be making a decision as to whether or not they bite the bullet and they pay these doubling, tripling increased premiums, or whether they just say, ‘I’m going to risk it. I’m healthy, and I hope I’m going to stay that way, and I’m going to drop my coverage.’ That’s the worry,” she said.

The Times interviewed leaders of state-based health care exchanges in Pennsylvania, Idaho, California, Massachusetts and Maryland. All five said they are prepared to update their systems with post-subsidy premium prices if Congress extends the enhancements, even after open enrollment begins, and will communicate those changes to consumers.

“Some aspects of that will just take days. Some of the communication might take a couple of weeks,” said Devon Trolley, executive director of the Pennsylvania Health Insurance Exchange Authority. “It’s not as easy as turning on a light switch, but we are prepared to make that change very quickly if the enhanced tax credits are extended by Congress.”

Slightly fewer than half of U.S. states run their own health insurance marketplaces, and the remainder are hosted on the federal exchange run by the Department of Health and Human Services.

Although open enrollment on the federal exchange and most state-based exchanges does not begin until Nov. 1, Idaho opened its marketplace to consumers on Oct. 15.

“We’ve spent a lot of time in 2025 planning for different scenarios, including an extension of the enhanced tax credits during open enrollment, or after open enrollment, for that matter,” said Pat Kelly, executive director of Your Health Idaho.

He said Idaho is prepared to make system updates and send out texts, e-blasts and other communications to update consumers so they can take advantage of additional savings if the enhanced tax credits are extended.

The Congressional Budget Office projects that a permanent extension of enhanced subsidies, as Democrats have proposed, would reduce gross premiums for Obamacare plans by 7.6% on average each year over the next decade.

The CBO said the number would be much lower for 2026 if Congress waits to act and “would fall to zero after the start of open enrollment.”

“We’re actually trying to get some more insight from some of the insurance companies about whether there are ways to alleviate those impacts,” Sen. Jeanne Shaheen of New Hampshire, a leader of Democrats’ push to extend the enhanced subsidies, said when asked whether Congress could still have an impact on premiums after Nov. 1.

Whatever Congress does, Mr. Cassidy said, lawmakers may need to push back the start of open enrollment for it to make a difference.

“If you did a two-week delay of open enrollment, you could potentially have an impact,” he said.

Sen. Rick Scott, Florida Republican, said consumers will face higher costs regardless of whether the COVID subsidies are extended. He prefers they are not.

“Premiums are going up because health care costs are going up because Obamacare is a disaster,” he said, adding that the Affordable Care Act “screwed up the whole market.”

Republicans argue that the subsidies’ structure, an advanced tax credit most often paid directly to insurance companies, is not helping lower premiums.

“The federal government is writing checks directly to insurance companies, and they still raise it,” said Sen. John Kennedy, Louisiana Republican. “A fair-minded person needs to ask: Why?”

Some Republicans have accused the health insurance industry of driving up prices for profits.

The health insurance industry source said premium increases are driven largely by inflation, rising drug prices and provider fees. The source also noted that the “medical loss ratio” rule enacted in Obamacare requires insurers to provide rebates to consumers if they don’t spend at least 80% of their premium revenue on clinical services and quality improvement.

KFF said insurers in the Obamacare marketplace have proposed an average gross rate increase of 20% for 2026, only 4 percentage points of which can be attributed to the pending expiration of the enhanced Obamacare subsidies.

The enhanced subsidies helped lower premiums by expanding the insurance risk pool with more healthy consumers who could afford coverage they would otherwise forgo.

Representatives for state-based marketplaces sent a letter to congressional leaders in early September warning that extending the subsidies after Sept. 30 would “result in irreversible coverage losses” from people who decide not to reenroll after seeing their premium costs spike.

They said consumers ages 18 to 24 would be most likely to drop coverage, which would “adversely impact risk pools, increasing premiums for remaining marketplace enrollees, especially people over age 55.”

Sen. Ron Wyden of Oregon, the top Democrat on the Finance Committee with jurisdiction over the premium tax credits, did not want to “speculate on all kinds of scenarios” of what may happen if Congress does not act before enrollment. Still, he said, time is of the essence.

“Obviously, the longer you go, you have the likelihood of higher prices,” he said.