As Californians prepare for the upcoming open enrollment period for health insurance, many will face significant cost increases. Starting November 1, premium rates for Covered California plans, which are part of the Affordable Care Act, are expected to rise dramatically.
California Obamacare Enrollees Face Rising Premiums
For 2026, premiums for federally subsidized plans on the Covered California exchange are projected to increase by an average of 97%. This surge is attributed to an ongoing federal budget dispute, which began on October 1, impacting tax credits that help millions afford their health insurance.
Impact of Subsidy Expiry
Approximately 1.7 million of the 1.9 million enrollees on Covered California benefit from these tax credits. The subsidies, initially introduced during the COVID-19 pandemic, aim to make healthcare more accessible.
If lawmakers do not act to extend the tax credits, they will expire at the end of the year. Covered California’s Executive Director, Jessica Altman, highlights that this could lead to many Californians being priced out of their health insurance plans.
Projected Enrollee Drop
- Without the subsidies, average monthly premiums could rise by an additional $125.
- An estimated 400,000 Californians could disenroll from their plans due to rising costs.
- This situation could push many individuals and families into a healthcare crisis.
The looming premium increase threatens to impact individuals who earn too much for Medicaid but not enough to afford private coverage. This demographic includes workers from various industries, such as hospitality and farming, who often balance multiple part-time jobs.
State-Level Relief Efforts
In response to the situation, California has allocated $190 million for state-level tax credits in the next budget. This allocation aims to support individuals earning up to 150% of the federal poverty level, keeping premiums at 2025 levels for eligible enrollees.
Even with these efforts, experts at the Urban Institute project a significant drop in Covered California enrollment. The national outlook is dire, with a Congressional Budget Office warning of 2.2 million uninsured Americans by 2026 if enhanced subsidies end.
Potential Healthcare System Strain
Organizations providing affordable health plans, such as L.A. Care, are concerned about losing enrollees. CEO Martha Santana-Chin explains that many of their members rely on subsidies, and without them, coverage loss is inevitable.
This potential increase in uninsured individuals could strain hospital systems, causing more patients to seek emergency care for non-emergency issues. Consequently, healthcare providers may raise prices, which could affect premiums for those with private insurance plans.
As the open enrollment period approaches, both Altman and Santana-Chin express concern primarily for low-income individuals, including communities of color, who may have limited alternatives. Any increase in out-of-pocket costs could heavily impact those living paycheck to paycheck.
The challenges ahead highlight the importance of legislative action to secure affordable healthcare options for all Californians.
