Connecticut ACA Marketplace Faces Significant Federal Subsidy Cuts by 2026
Connecticut faces significant changes to its health insurance market as federal policy adjustments under the "One Big Beautiful Bill" and other federal measures impact Medicaid and Affordable Care Act (ACA) marketplace plans. Approximately 150,000 residents purchase ACA plans through Access Health CT, the state's insurance exchange, with about 90% currently receiving financial subsidies. Enhanced premium tax credits, introduced during the COVID-19 pandemic via the American Rescue Plan Act and extended by the Inflation Reduction Act, are set to expire at the end of 2025, leading to average annual cost increases of $1,700 for many residents. Over 135,000 will lose some financial aid, with roughly 27,000 losing all subsidies entirely.
The expiration of these enhanced subsidies will also affect Covered Connecticut, a state program providing no-cost health and dental insurance to over 40,000 residents earning between Medicaid eligibility and 175% of the federal poverty level. The state estimates continuing this program without subsidies would cost $30 million annually. Connecticut's Department of Social Services (DSS) is reviewing the implications and awaiting further federal guidance before proposing legislative actions.
Federal policy changes will also restrict exchange plan access for certain immigrant groups. DACA recipients, previously eligible since late 2024, will lose eligibility in August 2025 following CMS regulatory changes. Similarly, green card holders without five years of residency will lose tax credit eligibility in January 2026, affecting almost 5,000 enrollees. By January 2027, eligibility for financial assistance will narrow to specific immigrant categories, excluding approximately 11,000 residents including refugees and asylees.
Additional administrative updates include elimination of the special enrollment period for individuals at or below 150% of the federal poverty level starting August 2025. CMS will also tighten income verification procedures, reducing documentation submission timelines from 150 to 90 days. These regulatory shifts reflect a broader tightening of federal health insurance market policies that will impact affordability and access in Connecticut.
Overall, these changes underscore evolving federal priorities in health insurance subsidies and eligibility, directly influencing state budget considerations, healthcare access for vulnerable populations, and the operational standards of state-based ACA exchanges. Connecticut officials continue to assess the fiscal impact and anticipate legislative discussions to address the challenges posed by these federal modifications.