Republicans could take midterm hit if Obamacare subsidies expire

As congressional Republicans debate this fall whether to extend the Affordable Care Act enhanced subsidies, they need look no further than Florida to gauge the potential midterm election fallout for the party.

The red state has the highest number of Obamacare enrollees in the country, and millions of low- and middle-income residents have used the subsidies to afford health coverage since their creation in 2021. Florida, an epicenter of the MAGA movement, also has a disproportionately large number of small business owners and employees who are heavily dependent on the tax credits.

Not a single Republican voted in favor of creating the subsidies when then-President Joe Biden pushed them through, but the reliance of Sunshine State residents on them could give GOP representatives and senators cause to change their minds. Insurers, hospitals and business groups are mobilizing to push them on the issue. Polls show voters are likely to react poorly to skyrocketing insurance premiums, especially when combined with cuts to Medicaid and the ACA that Republicans enacted this summer.

“If this does not get extended, the impact is just going to be tremendous,” said Julio Fuentes, president and CEO of the Florida State Hispanic Chamber of Commerce. “It’s just going to be something out of left field for most people, because they don’t even know that this is happening, and they’re going to just get their next bill and see a 200, 300 percent increase, and be like, ‘what is happening here?’”

Republicans in the most competitive districts nationally are already down three percentage points among all registered voters, according to a July survey from Trump pollster Fabrizio Ward. That deficit balloons to 15 points if the candidate lets the boosted tax credits expire. 

Nearly 80 percent of voters, including more than half of Trump voters, support Obamacare premium tax credits, the poll said.

Three of the Republicans who represent Florida in the House are in districts where more than a third of residents are enrolled in the ACA. Seven others represent districts with at least 13 percent of constituents on Obamacare, according to data from the health research firm KFF.

The 10 lawmakers didn’t respond to requests for comments on whether they would push House leadership for a subsidy extension. Florida’s two Republican senators also didn’t respond to requests for comment.

“If you want something that would become a big political mess, it is going into next year's election with people having rate shock and not being able to purchase health care coverage,” said a health insurance executive who POLITICO granted anonymity to speak freely.

A jump in enrollment

The enhanced tax credits, which were created with the American Rescue Plan Act of 2021 and extended in the Inflation Reduction Act of 2022, have contributed to record Obamacare enrollment. The number of enrollees has doubled nationally since 2020, with 24 million people signing up in 2025.

In Florida, nearly a fifth of the state’s 23 million residents, or 4.6 million people, are on Obamacare plans. They are especially popular with low-income residents, early retirees and small business owners and their employees — all of whom are disproportionately represented in the state.

Insurers are already submitting rate filings for 2026 to state regulators, and their median national proposed rate increase is an 11-percentage-point jump over last year, as some insurers factor in the expiration of the subsidies, according to a KFF analysis.

However, some beneficiaries will be hit much harder than others, depending on the size of the subsidy they receive. For instance, a low-income enrollee making 166 percent of the federal poverty level, or about $26,000, annually, now pays little. But the person would see a spike of 573 percent to their premiums for a silver tier plan, KFF found in a 2024 analysis, or about $76 more per month.

The enhanced subsidies were also extended to people who earned above 400 percent of the poverty level — about $65,000 for an individual or $130,000 for a family of four — ensuring they would not pay more than eight percent of their annual income for health insurance. If Congress stands pat, they would no longer receive help.

KFF gave an example of a 45-year-old making 432 percent of the poverty level who would see a premium increase of $941 a month.

The small business impact

Florida, with its large number of small businesses dependent on the ACA, is especially vulnerable if the subsidies expire.

About 3.3 millioncompanies with fewer than 500 employees were based in the Sunshine State in 2024. That’s an increase of about 30 percent from 2.5 million in 2019, according to data from the U.S. Small Business Administration.  

About 88 percent of small business owners and self-employed and part-time workers in Florida depend upon ACA premium tax credits, according to Florida Blue, the largest Obamacare insurer in the state. Last year, Floridians received about $2.1 billion in enhanced subsidies, according to KFF.

“The marketplace plays a pivotal role in supporting individuals who are employed but who may not have otherwise had access to coverage because generally those small businesses could not afford to provide coverage,” said Mary Mayhew, president and CEO of the Florida Hospital Association.

For business owners, the small group health insurance market can be administratively burdensome and expensive. The loss of the subsidies will put them at a disadvantage in hiring or retaining workers who can find employment with companies that provide health insurance.

“Trying to retain employees when you can't give them health insurance coverage — that's a real big [obstacle],” said Fuentes.

Business groups in Florida, including right-leaning ones, have been hosting roundtables and meeting with congressional and state lawmakers to drive that point home. They are also stressing that expiration of the subsidies could lead to a less business-friendly state.

Allowing the subsidies to lapse also could have a devastating impact on the state’s budget, as more small business workers opt to go without health insurance or enroll in Medicaid if they qualify, said Brewster Bevis, the president and CEO of the Associated Industries of Florida, a business association in Tallahassee.

"They're going to pay it out of pocket, or they're going to go to the hospital systems for their primary care, which is going to increase costs on hospitals, increase costs from Florida taxpayers on uncompensated care, or go onto the Medicaid rolls. It's just a real no-win situation,” he said.

Florida is one of 10 states that have not expanded Medicaid, so it’s more difficult for some low-income residents to qualify for the government health insurance program. The enhanced subsidies ensure that people who would be eligible under an expansion — those making just above the federal poverty level, with incomes between about $15,600 and $21,600 — can get Obamacare coverage, typically with no premiums.

Two-thirds of the 4.6 million Floridians on Obamacare plans are in this gap, Mayhew said. Any increase in the cost-sharing could be critical for this population.

“These are people who make just above the poverty level so they don’t have a lot of spare cash,” said Cynthia Cox, vice president and director of the ACA program for KFF.

Political ramifications

If the subsidies expire, elected officials in Florida and across the country will likely have to deal with the repercussions of rising costs and a higher uninsured rate in the next election cycle.

But as of now, GOP lawmakers in Congress are saying they’ll likely make a decision at the end of the year when the tax credits are set to expire.

“It’s coming, but … we have time to deal with this,” Republican West Virginia Sen. Shelley Moore Capito told POLITICO in late July.

Congress could extend the subsidies just before the year-end expiration date, though insurers hope an extension comes sooner to make it easier for them to set premiums for next year.

Insurers are hoping that emphasizing the political pain that could come from not extending the subsidies will be enough to spur Republicans to act. The GOP’s recently enacted One Big Beautiful Bill Act includes more than $1 trillion in health care savings, mostly from Medicaid and some from the ACA. The nonpartisan Congressional Budget Office has estimated millions could lose health insurance as a result — but many of the provisions projected to reduce insurance coverage won’t go into effect for a few years.

The subsidy issue, insurers are telling lawmakers and the Trump administration, could have more immediate political impact on the midterm elections next year as Republicans vie to hold onto their slim majorities in the House and Senate.

"This could turn into a big political challenge for the White House, as well as for a lot of very competitive districts around the country, if it's not resolved,” said the health insurance executive who was granted anonymity.

For Florida specifically, expiration of subsidies could isolate a key faction that Trump won over in the 2024 election: Hispanic voters, said Fuentes, the president and CEO of the Florida State Hispanic Chamber of Commerce.

“The administration did a great job rounding up that Hispanic vote, and they rallied behind him, not only here in Florida, but truly all over the country,” he said. “And this is one of these issues that, if it's going to hurt their business and hurt their families, it might have an effect next cycle.”

Whether Trump speaks out on the issue might be a tipping point for Republicans unsure about backing a subsidy extension. Trump hasn’t publicly said whether or not he’ll push GOP lawmakers to extend the tax credits, though his administration has taken steps to rein in spending on the ACA.

“If Trump says, ‘We're going to reel this back,’ I think a lot of [Republicans] are going to just get on that bandwagon,” said Bevis.