Not renewing subsidies for health insurance under the Affordable Care Act would disproportionately affect Republican states, particularly in the South, according to analysts.
The issue is at the heart of the longest-ever federal government shutdown as Democrats have been pushing for an extension of the subsidies, while Republicans want to let them expire at the end of the year.
For now, the online marketplace for ACA health plans is pricing in rates without the subsidies. Open enrollment for coverage in 2026 began this month, with premiums more than doubling on average, according to KFF, a nonpartisan health policy research group. That’s due to the ACA subsidies expiring and insurers hiking rates.
In an Oct. 23 note, Oxford Economics senior U.S. economist Matthew Martin pointed out that more than half of the 24 million enrollees receiving these subsidies live in a handful of Southern states.
“Southern states have a much higher share because most of these states did not expand Medicaid coverage in 2010’s ACA or 2021’s American Rescue Plan Act despite federal support to do so,” he wrote.
Of the 10 states with the highest share of the population receiving Obamacare subsidies, eight are in the South and voted for President Donald Trump last year. They include Florida, Georgia, Texas, Mississippi, South Carolina, Alabama, Tennessee and North Carolina. The other two states in the top 10, Utah and Wyoming, are also Republican states.
States that expanded Medicaid under the ACA allowed more low-income people to receive health coverage.
For the other states, low-income people who didn’t meet the program’s requirements could still get subsidies to enroll in Obamacare plans that offset the cost completely or almost completely.
The subsidies helped ACA enrollment more than double since 2020. But the expiration of the subsidies would leave enrollees exposed to the full cost.
A KFF analysis last month of ACA marketplace data found that 57% of enrollees live in congressional districts represented by a Republican.
In fact, all congressional districts in Florida, Georgia, Mississippi, and South Carolina have at least 10% of their populations enrolled in Obamacare plans, according to KFF. That goes for nearly all districts in Texas and Utah.
The Congressional Budget Office has estimated that extending the ACA subsidies would cost $35 billion per year. Meanwhile, letting them expire would result in about 4 million more people becoming uninsured by 2034, CBO said.
In addition to the fiscal costs, there could be political costs if voters see their health insurance costs soar. Affordability was a top issue in the off-year elections last week, and the subsidies are emerging as an issue for the midterm elections next year.
“While a relatively small share of the national population gets their coverage through the ACA Marketplaces, in some districts, the number of ACA enrollees could be enough to swing a close election,” KFF said last month.