Say you live in Wyoming.
You’re 60 years old and married, with a household income of $82,000 per year, a little higher than the state median. You have health insurance coverage through Wyoming’s marketplace, which is powered by the Affordable Care Act, or “Obamacare.”
Right now, you’re probably paying about $48 per month in premiums, which are the fees you owe insurers to simply be on their plans. But in 2026, your premium payments could skyrocket to around $300 per month, according to the health policy firm KFF — a rise of over 500%.
In the West, more than 4 million people are enrolled in marketplace plans supported by the Affordable Care Act. Depending on their age and location, many of them could soon be facing sticker shock. Rural areas, where fewer people get insurance through employers and health care costs tend to be higher, could be particularly hard hit.
Those premium increases are at the heart of the government shutdown, which is now in its second week. Here’s a primer on what’s at stake.
What’s up with health care premiums?
In 2021, the American Rescue Plan Act rolled out enhanced premium tax credits, which dramatically reduced how much consumers paid for health insurance plans on state marketplaces.
With these credits, people with very low incomes saw their premium payments fall to $0. Even people making more than 400% of the federal poverty line were eligible for the credits; their premium payments were capped at 8.5% of their household incomes.
Katherine Hempstead, a senior policy adviser at the Robert Wood Johnson Foundation, said that made an especially big difference in states with high health care costs — like Wyoming and Alaska, which have the second- and fourth-highest average health care premiums in the country.
“The enhanced premium tax credits made an enormous difference in affordability for a lot of people there,” Hempstead said. “Especially people that were over 400% of the poverty level who didn’t get any tax credit before.”
The credits proved popular. Since their introduction, enrollment in marketplace plans more than doubled nationwide. In the West, the greatest increases were seen in Utah, Arizona, Wyoming and Montana.
Here’s how much marketplace enrollees in Western states receive monthly, on average, in the form of tax credits through the program:
| Location | Average Monthly Advanced Premium Tax Credit |
|---|---|
| United States | $550 |
| Alaska | $1,009 |
| Arizona | $458 |
| California | $559 |
| Colorado | $466 |
| Idaho | $407 |
| Montana | $545 |
| Nevada | $465 |
| New Mexico | $591 |
| Oregon | $531 |
| Washington | $445 |
| Wyoming | $916 |
Source: KFF
Prior to the American Rescue Plan Act (ARPA), ACA marketplace consumers with household incomes between 100% and 400% of the Federal Poverty Level (FPL) could qualify for Advanced Premium Tax Credits (APTCs), which help make their coverage more affordable throughout the year by lowering their share of monthly premium costs. Starting in 2021, the ARPA increased subsidies for people who already qualified for APTCs and expanded subsidy eligibility for those with household incomes above 400% FPL. The Inflation Reduction Act has extended these enhanced subsidies up through 2025. Consumers who qualify for APTCs may choose how much of the tax credit to apply to their premiums each month, up to the maximum amount for which they are eligible. The amount of APTC an enrollee may receive depends on household income and the cost of the second lowest cost silver plan available to enrollees in their local area.
Consumers who receive premium tax credits and who have income up to 250% FPL are also eligible for Cost-Sharing Reductions (CSR) if they enroll in a Silver plan in the Marketplace. The CSRs lower the out-of-pocket costs consumers face. 12.5 million ACA Marketplace enrollees received CSRs in addition to premium tax credits as of February 2025. The CSRs are not included in the estimates reported here.
Sources: Effectuated Enrollment: Early 2025 Snapshot and Full Year 2024 Average, Centers for Medicare and Medicaid Services (CMS), Data as of March 15, 2025.
Definitions: Average Monthly Advanced Premium Tax Credit (APTC) is the total amount of APTC for the month for all individuals who received APTCs, divided by the number of individuals who received APTCs.
Footnotes: Oregon operates a Basic Health Program (BHP), OHP Bridge, which provides coverage to individuals with incomes 138%-200% of the federal poverty level who would otherwise be eligible to purchase subsidized coverage through the federal Health Insurance Marketplace. Individuals can enroll in the BHP throughout the year, and as of January 15, 2025, there were 31,944 people enrolled in OHP Bridge.
What does that have to do with the shutdown?
The enhanced premium tax credits were extended by the Inflation Reduction Act in 2022 but are set to expire at the end of 2025.
Some Republicans want to let that happen. Critics of the credits point out that they do nothing to fundamentally lower the cost of health care, that they shouldn’t be available to those with high incomes and that extending them would increase the deficit by $350 billion in the next decade.
“The Biden bonus COVID payments must not become another permanent government giveaway,” Senator John Barrasso, R-Wyo, wrote in a news release. “Temporary means temporary.”
Other Republican lawmakers have said they’re open to extending the credits, including Alaska Senators Lisa Murkowski and Dan Sullivan.
Democrats want to keep the credits, because cutting them means that an estimated 4.2 million people would lose health insurance over the next eight years.
“Health care tax credits that millions of families rely on to afford their coverage are about to disappear,” Senator Patty Murray, D-Wash, said at a press conference. “That is going to be so devastating — some of the biggest health care price increases for families in our nation’s history.”
“Health care tax credits that millions of families rely on to afford their coverage are about to disappear.”
And neither side seems like it’s budging.
What will happen if the credits expire?
If the tax credits expire as planned, marketplace enrollees’ premium payments will rise by an estimated 114%, on average — with increases of more than 300% in Wyoming and parts of Montana, Oregon, California, Utah, New Mexico, Arizona and California.
An online calculator created by KFF lets people compare premium payments with and without the credits. Nevada and Idaho are also allowing residents to preview their 2026 rates online. Open enrollment starts in Idaho on Oct. 15, and in most other states on Nov. 1.
Across the board, the premiums themselves are also expected to rise, because healthy people will leave the marketplace, increasing the overall risk pool for insurers.
“The people that lose their coverage through the marketplace, they don’t have anywhere else to go,” Hempstead said. “If they can’t afford the premiums, they’re gonna be uninsured.”
“If they can’t afford the premiums, they’re gonna be uninsured.”
Who will be most affected?
More than 24 million Americans, including roughly 4 million Westerners, are covered through the marketplace. Nearly all (93%) of them receive enhanced premium tax credits.
Many of them are people without employer health coverage, which includes those who own or work at small businesses, as well as those who are self-employed. More than a quarter of farmers and ranchers, for example, relied on marketplace coverage in 2023, according to KFF.
Older adults who have retired, but are not yet eligible for Medicare, would be hard hit, too.
Hempstead is also concerned about people earning more than 400% of the federal poverty level, because their tax credits will completely disappear.
For instance, a family of four in Alaska earning a high income of $165,000 per year could still feel the crunch of premium payments that rise by more than $2,000 per month.
“It’s really like night and day for people at that higher end of the income distribution,” Hempstead said.
Why are rural areas a cause for concern?
Because rural areas have higher health care costs, their residents receive the greatest benefit from the enhanced tax credits, according to a study from the Urban Institute.
Rural areas also have fewer large employers who can sponsor insurance plans, as well as fewer health care providers, Hempstead said.
If rural residents cancel their insurance plans because they can’t afford the premiums, Hempstead said that could have dire consequences. People could forgo preventative appointments important to their health, only seeking help when they’re desperate. And then they might request free care, further weakening rural hospitals that have already been battered by cuts to Medicaid. Some rural hospitals, she fears, will end up closing.
“If Congress doesn’t take action, people are going to see really big premium increases. And it’s projected that a lot of people are going to drop coverage,” Hempstead said. “That has a ripple effect throughout the entire community.”
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