When Congress did not extend the Obamacare subsidies that had been in place since the pandemic, JennTara Ward faced an increased health insurance bill for her family that was more than their monthly mortgage payment and about five times what they paid last year.
Beginning this year, their monthly cost would have soared to about $3,000.
Ms. Ward, who owns a yoga and wellness business in Santa Fe, N.M., and her husband, an acupuncturist whose job does not include health insurance, were not sure what to do. Could their teenage son play sports if he didn’t have coverage? Should they move to another country? Maybe she could find a different job with an employer that did offer health insurance?
The options were not great. So they were relieved to discover that New Mexico had fully replaced the expired federal subsidies with state money, the only state to do so. Without the subsidies, an estimated 27,000 New Mexicans would have dropped their insurance. Instead, sign-ups have surged, with an additional 10,000 people now covered.
“We are so proud of the incredible enrollment on the health insurance exchange,” said State Representative Reena Szczepanski, a Democrat who helped spearhead the effort to replace the lost subsidies. “We’ve broken all records this year.”
In a special legislative session last fall, Representative Szczepanski, the House majority leader, and her colleagues, including some Republicans, agreed to make up for the missing federal subsidies until mid-2026. Then, this month, the governor signed legislation allowing New Mexico to make up the difference for at least another year, until mid-2027, using money from a special health care fund.
“Subsidies work, we know they work,” said Alex Sanchez, the chief experience officer for the New Mexico marketplace, BeWell.
Nearly two dozen states, including New Mexico, have taken actions that appear to have blunted the impact of the lost federal subsidies. Some of these moves were in direct response to the expiration of the subsidies, while others had been in place for years.
While only New Mexico found the money to fully replace the subsidies, other states, including California, Massachusetts and Vermont, offered their own subsidies that could help make up for some of the missing money.
Some states, including New York and Minnesota, have special programs for residents to help them with coverage.
Americans in other places have not been as lucky. Overall enrollment in Obamacare has declined nationally by more than one million people since early 2025, the first drop since 2020. In the coming months, policy experts say, they expect more people to cancel their coverage after receiving insurance bills that they cannot pay. The final tally will not be clear until the summer.
A follow-up survey released on Thursday by KFF, a nonprofit that conducts polling and research on health policy, found that 9 percent of the people it previously surveyed who were covered under the Affordable Care Act last year had dropped their coverage and were now uninsured. Among those who signed up again, 17 percent said they were not confident they would be able to afford their premiums this year.
Some states have already experienced substantial declines in enrollment. In North Carolina, it dropped by about 20 percent, or about 200,000 people. Insurance rates in the state were set to increase by an average of nearly 30 percent for 2026.
“Many just were shocked by the substantially higher premiums,” said Nicholas Riggs, the director of the NC Navigator Consortium, which helps people in the state enroll in Obamacare coverage. Many people he spoke with had concluded that they simply could no longer afford the cost of insurance, he said.
But New Mexico, which has Democratic majorities in the Legislature and a Democratic governor, has long embraced the Affordable Care Act. Before the law took effect, about a fifth of its population was uninsured. The state took advantage of the law’s insurance reforms, expanding Medicaid and enrolling people in Obamacare, to reduce that rate by roughly half.
Over the years, as the A.C.A. came under attack, state lawmakers took actions that protected those gains. When the federal tax on health insurers, originally part of the law, was repealed, New Mexico authorized an additional state-based surtax on the insurers in 2021 that created the state’s Health Care Affordability Fund.
While some of the money is used for general purposes, the fund is also used to lower the amount small businesses paid for coverage and to reduce the out-of-pocket costs for some people enrolled in Obamacare. It also provided the money to replace the federal subsidies, at least for a time.
The fund has become “a strong tool used to cushion folks from absorbing those costs,” said Abuko D. Estrada, the director of health care for the New Mexico Center on Law and Poverty. He added that the state had been “chipping away” at making insurance and health care more affordable to its residents, many of whom are poor.
Carmen Meyer, a nurse who now works as a consultant in Albuquerque, said she burst into tears last fall when she saw that the Obamacare premiums for her family were going up by about $1,500 a month. “It was so scary to see that,” she said. She and her husband would have had to raid their retirement savings to remain insured. With the state subsidies she is still paying $450 more than last year, but it is much less of a strain on her finances than she feared.
Similarly, when the first Trump administration ended the federal payments that provided incentives for insurance companies to offer plans that had lower deductibles and co-payments for low-income people, New Mexico found a way to make sure some residents were not priced out. New Mexico required that insurance companies calculate their prices in a way that made plans more affordable to a greater number of people.
Texas, which has seen a 5 percent jump in its Obamacare enrollment compared with last year, passed legislation in 2021 for similar reasons, making sure insurers were not determining their prices in a way that disadvantaged some residents. As a result, some people now have a choice of low-cost or free plans.
“It was really an amazing bipartisan policy success story,” said Stan Dorn, a health policy expert at the Hispanic civil rights and advocacy organization UnidosUS, about the Texas legislation.
But there is some debate about how insurers should price their plans, and the Trump administration is now proposing to collect detailed information from the insurers about those calculations. If the administration decided to do away with states’ ability to hold down the prices of some plans, consumer costs would probably go up, said Mr. Dorn, who also questioned such a move’s legality.
States that have over the years taken steps to make Obamacare plans more affordable appear to have stemmed their enrollment losses.
“It makes a significant difference,” said Charles Gaba, a health care policy analyst who studies the Affordable Care Act markets. By his calculation, states that did not take steps to mitigate insurance costs experienced an average drop in enrollment of 9 percent, compared with an overall drop of about 5 percent. Those that took some action generally saw much less drastic declines or, in a few cases, increases in enrollment.
Rebecca Robbins contributed reporting.
Reed Abelson covers the business of health care, focusing on how financial incentives are affecting the delivery of care, from the costs to consumers to the profits to providers.
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