Shutdown Ends; No Obamacare Deal: Implications for Oregonians

Next year, residents of Oregon who rely on the Affordable Care Act (ACA), commonly known as Obamacare, for their health insurance coverage could face substantially increased costs. This follows the exclusion of a solution for the soon-to-expire enhanced premium tax credits from the anticipated federal spending package, designed to end the most extended government shutdown in U.S. history.

The current agreement only includes a promise to hold a vote in December on whether to renew these tax credits, which were introduced during the pandemic. Unless Congress takes action, the credits will expire at the end of the year. The stopgap funding bill is still awaiting approval from the House of Representatives.

Uncertainty is looming as open enrollment for 2026 Obamacare coverage has already commenced in Oregon. Residents can enroll until Jan. 15 for coverage that starts in February. However, the potential implications of the shutdown deal on Obamacare subsidies are causing worry.

Understanding ACA subsidies

The ACA was enacted in 2010 to extend health insurance coverage to those without access to it through their employers or government programs. One of the ways it achieved this was by creating marketplace plans and offering income-based subsidies.

Initially, only households earning between 100% and 400% of the federal poverty level were eligible for premium tax credits under the ACA. However, during the pandemic, Congress temporarily increased these subsidies through the American Rescue Plan, later extended by the Inflation Reduction Act. These enhancements mean that many people with lower incomes could get a standard plan with no monthly premium, and nobody had to pay more than 8.5% of their income for it — even those earning higher incomes.

These increased subsidies were never meant to be permanent, and will return to pre-2021 levels at the end of the year unless Congress steps in. If the enhanced subsidies are maintained, the Congressional Budget Office estimates that they will increase the national deficit by about $23 billion next year and around $350 billion over the next decade.

The impact in Oregon

Most Oregonians will not be affected by these changes since they are covered through work or the Oregon Health Plan, a Medicaid program. However, about 140,000 Oregonians, or roughly 3% of the state’s population, will be impacted as they are buying their own insurance through the ACA marketplace.

The fallout will not be evenly distributed across the state. Rural counties, despite having smaller total enrollment numbers, have the highest percentage of residents depending on subsidies. For instance, over 90% of marketplace enrollees in counties like Malheur, Baker, Morrow, Grant, Harney, and Umatilla received financial aid this year.

Higher-income enrollees, especially those earning more than 400% of the federal poverty level, will be hit hardest. These families will lose all federal financial assistance and will have to pay the full price of their Obamacare plans. Counties with the largest share of these higher-income ACA enrollees include Hood River, Deschutes, and Benton.

Potential rise in ACA insurance costs for Oregonians

If the enhanced subsidies are not renewed by Congress, the ACA enrollees will still qualify for some assistance, but significantly less.

Insurers in Oregon have already incorporated these changes into the 2026 rates. According to the Oregon Department of Consumer and Business Services, plans on the individual market will increase by roughly 10% next year. Nationally, insurers are expecting steeper hikes of about 26%, as per the analysis by health care research nonprofit KFF.

However, experts assert the real impact will come from the loss of subsidies, not the rate increases themselves. The Oregon Health Authority predicts marketplace enrollees could pay between $127 and $456 more each month, depending on their income.

Currently, with the enhanced subsidies, anyone earning more than four times the federal poverty level — $62,600 for a single or $128,600 for a family of four — pays no more than 8.5% of their income for premiums. Without congressional action, that cap will vanish starting Jan. 1, leading to significantly higher monthly premiums for some people. For example, the monthly cost of a standard health plan covering a 50-year-old Portland couple would jump from $850 to $1,423.

Lower-income families could also feel a considerable squeeze, according to health economist Rajiv Sharma, as even modest premium hikes would significantly impact their tight household budgets.

However, the lowest-income Oregonians are largely protected from the change. Those earning up to 138% of the federal poverty level qualify for the Oregon Health Plan, the state’s Medicaid program. Furthermore, the recently launched OHP Bridge Plan provides Medicaid-like coverage for adults earning up to 200% of the poverty level, with approximately 32,000 people currently enrolled.

But for those just above that cutoff, the end of enhanced subsidies will mean losing access to free or very low-cost insurance.

Concerns are growing among middle-income families, particularly those living with a disability or illness and unable to work, that they may be thrust into a crisis.

Potential impact on Oregon’s ACA marketplace

Rising insurance premiums not only affect households but can also shape the broader health care system.

Sharma explained that when premiums increase, younger and healthier people are more likely to forego coverage. This leaves insurers with a customer base that is smaller, older, and sicker. To cover the needs of this riskier pool, companies tend to increase prices further. This vicious cycle can lead insurers to reduce networks, withdraw from counties, or leave the marketplace entirely, especially in rural areas.

Less insured people can also lead to more uncompensated care, where hospitals and clinics have to absorb unpaid bills, often leading to higher costs for everyone else.

Oregon’s capability to provide some relief

Should Congress not extend the expanded subsidies, Oregon will have limited power to cushion the impact.

There are also technical barriers. Since Oregon does not control HealthCare.gov or have direct access to its consumer data, it cannot easily identify those who would qualify for help or deliver payments quickly.

Options for Oregonians

Despite the potential rise in costs, Oregonians shopping for Obamacare plans for next year can still implement strategies to manage the increase. During open enrollment, they can compare plans and, if necessary, switch to one with lower premiums.

If Congress passes a late extension of the subsidies, Coven explained that HealthCare.gov will automatically update subsidy amounts and send the new information to insurers. Billing adjustments might take a short time to show up, but federal grace-period rules would give consumers enough time to pay for their January coverage without losing it.

The Oregon Health Authority has published an online guide to assist residents in comparing plans and understanding how the expiring subsidies could impact costs in 2026. The state’s health insurance marketplace can also link residents with local insurance agents for free assistance.