Open enrollment on Obamacare’s exchanges is upon us. People shopping for coverage will be greeted by higher premiums.
According to one recent analysis from the Peterson-KFF Health System Tracker, premiums for 2026 coverage will rise by 18 percent. Out-of-pocket costs could go up hundreds or thousands of dollars, according to KFF.
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For the Democrats holding the federal government hostage over Obamacare’s enhanced premium tax credits, this news might seem like vindication. If only Republicans agreed to extend the COVID-era enhanced premium subsidies, they argue, then exchange coverage would be affordable again.
But the end of the enhanced tax credits has little to do with the skyrocketing price of coverage. As new research from the Paragon Health Institute points out, the expiring subsidies account for just 3.3% of 2026 exchange premiums. The overwhelming majority of the rate hikes result from other factors, including the basic structure of Obamacare.
The cost of complying with the health law’s insurance market regulations has forced insurers to hike premiums steadily for over a decade. The enhanced tax credits have merely hidden that reality from consumers — and shifted more of the cost of coverage to taxpayers.
The Congressional Budget Office estimates that making the enhanced subsidies permanent would cost the federal government $350 billion over the next decade. Democrats are insisting that Republicans throw hundreds of billions of dollars in taxpayer money into a broken system that, by its very nature, is destined to keep premiums rising.
Obamacare isn’t the only reason premiums are soaring. Insurers cite factors such as increased demand for weight-loss medications known as GLP-1 inhibitors, as well as rising healthcare costs stemming from tariffs and inflation.
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Nevertheless, Democrats continue to blame the impending increase in the cost of coverage on the expiration of the enhanced premium credits. Democrats themselves set the enhanced subsidies up to expire at the end of 2025. They wouldn’t have been necessary if Obamacare had actually made health insurance affordable.
Taxpayers can no longer afford to cover up this mess. And patients deserve market-based reforms that can actually drive premiums down, not just obscure their cost.
Sally C. Pipes is president, CEO, and Thomas W. Smith fellow in healthcare policy at the Pacific Research Institute. Her latest book is The World’s Medicine Chest: How America Achieved Pharmaceutical Supremacy—and How to Keep It (Encounter 2025). Follow her on X @sallypipes.