Community Health & Wellness

Washingtonians feeling pain from elimination of health care tax credit

Posted on January 28th, 2026 By: Conor Wilson

Not long after Rebecca Nystrom relocated from Arizona to start a graduate program at the Seattle School of Theology and Psychology, her husband became seriously ill. Alongside her daughter, who has autism and mobility issues, medical expenses became an even higher annual expense.

Nystrom, who has worked as an independent therapist in Bremerton since 2022, does not have an option for employer-based insurance. Instead, she has purchased the coverage her family needs through the Washington Healthplanfinder, an online marketplace run by the state.

But like thousands of other Washingtonians, she is reconsidering whether she will stay with her insurance long-term. Her annual premium rose this year by well over 200%, to a monthly rate of $2,380. Her lowest option for a deductible also doubled, rising to $1,000, meaning she must pay more out of pocket.

“I don’t know what we will do,” Nystrom said, noting she has considered going without insurance herself to keep her family covered or even taking a part-time job on the weekend for insurance benefits.

Rebecca Nystrom, therapist and owner of Healing Gardens Counseling pets her dog Lily in her office in Bremerton on Tuesday, Jan. 20, 2026. Photo by Meegan M. Reid/Kitsap Sun

The marketplace and rising premiums

Premiums and other costs associated with plans bought through the Washington Healthplanfinder rose after Congress declined to extend an enhanced premium tax credit before the end of 2025. In some cases, insurance costs doubled or tripled in price.

Thousands of state residents have opted out of insurance. More could follow in the coming months.

Washington’s Healthplanfinder was created through the Affordable Care Act, a federal law more commonly known as Obamacare. While most Americans get insurance through their employer or a government program like Medicaid or Medicare, a significant number fall outside these two camps. That population typically includes many small business owners, contractors and gig workers.

The marketplace system is a government-run platform that allows individuals to shop for commercial plans directly from insurance companies. It was designed to serve the uninsured population. The Affordable Care Act capped premium prices on the marketplace for many enrollees at a certain percentage of their income.

An enhanced premium tax credit then further reduced rates. It also expanded eligibility and drove record numbers to purchase insurance through the ACA. A vast majority of the almost 300,000 Washington residents who bought insurance on the marketplace last year had premiums lowered by these subsidies, which were introduced in 2021.

Average monthly increase of $1,500

That includes roughly 19,900 residents in Washington’s Sixth Congressional District, which spans the Olympic and Kitsap peninsulas plus Gig Harbor and part of Tacoma. Those same residents now face an average monthly payment increase of $1,500, U.S. Rep Emily Randall, D-Bremerton, said in a speech on the House floor this month.

Democrats initiated what ended up being the longest shutdown in the country’s history last fall, hoping to pressure the Republican-controlled Congress to extend the lapsing subsidies. That shutdown ended without a deal.

Earlier this month, House Democrats and 17 of their Republican colleagues approved legislation to restore the lost subsidies for another three years. The bill, however, is likely dead on arrival in the Senate, which has already rejected a similar proposal.

Randall, who was not available for an interview, blamed Republican leadership during her speech. She said they were unwilling to negotiate. Randall also made a plea for a universal health care system that did not force people to forgo necessary care due to medical bills.

“These tax credits – which expired on Dec. 31st – could have been continued had Republicans not skipped every opportunity to prevent it,” she said. “But they chose to walk away from the table.”

Open enrollment ends, WA picture still unclear

Ingrid Ulrey, CEO of the Washington Health Benefit Exchange, the agency which runs Washington’s online marketplace, remains skeptical Congress will extend the subsidies. However, she said the state has taken some creative steps to counteract the effects on its customers, at least for this year.

An estimated 40,000 Washington Healthplanfinder customers dropped coverage this year, half the number initially projected.

Ulrey said a pair of mitigation tactics stabilized rates for some policy holders. As a result, premium costs were not up across the board. They even declined for people in some income brackets.

People making less than the federal poverty level — a population composed largely of lawfully present immigrants — saw the highest increase in average premiums. The benefit exchange estimated their premiums would increase more than 1,900% from 2025.

On the other end, people earning four times the federal poverty level (more than $62,000 annually for an individual) saw average hikes of over 80%, with some seeing rates double or even triple, Ulrey said.

The Washington Healthplanfinder’s annual open enrollment period for individuals to purchase or change insurance plans ended on Jan. 15. A record number of calls flooded the office for most of the period as people sought plans in an uncertain market.

More likely to drop coverage in the coming months

Although the outcome was not as dire as officials feared, the true extent of the subsidy lapses will not be fully known for months, Ulrey said.

At the end of open enrollment, 290,000 residents bought plans through the Healthplanfinder, down from the 308,000 at this time last year. A total of 28,000 people actively canceled their coverage, up 38% from last year. More individuals are also expected to drop in the coming months, after they start receiving their first monthly bill.

Many auto-renew each year, Ulrey said, meaning they may not be aware of how much their insurance premium has risen. In a standard year, anywhere from 5% to 10% of customers drop coverage. The fear is there could be a steeper drop this year.

“That’s what we’re holding our breath for,” Ulrey said.

Cuts to the Medicaid insurance program will start to take effect in 2027. Combined with the negative impacts to the marketplace, Ulrey said the percentage of state residents without coverage could creep back into double digits after over a decade of reducing the uninsured population.

“That hurts everyone,” she said. “It creates real pressure on our health system, our hospitals and clinics. It puts people in medical debt and then it is just a downward spiral.”

What’s in your control

Nystrom remembers sitting on the couch next to her husband when she read that the U.S. House passed a bill to extend the health insurance subsidy. It was a temporary moment of relief when all the stress she had been holding onto left her body.

When talking to other self-employed therapists who also get their insurance through the marketplace, Nystrom said she tries to adhere to the advice she gives her clients about accepting what was in their control.

Amid the uncertainty, she decided something she could do was engage with her state and federal representatives, telling them about the stress she and many of her clients are enduring.

“I definitely had patients who if they lost [insurance] it would have been devastating,” she said. “So I wasn’t just fighting for my family, I was fighting for them.”