Overview: Open enrollment for Covered California, the state’s health insurance marketplace under the Affordable Care Act, is set to begin soon, but many Californians are at risk of increased monthly premiums or losing health insurance altogether due Congress’s lack of consensus regarding the Enhanced Premium Tax Credits. Nearly two million Californians will see a sharp increase in their health insurance if the tax credits aren’t restored, with low-income Californians being hit the hardest.
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Open enrollment for Covered California, the state’s health insurance marketplace under the Affordable Care Act, is set to begin in less than one week.
With the government shut down, and Congress no closer to coming to a consensus regarding the soon-to-expire Enhanced Premium Tax Credits, many Californians are at risk of increased monthly premiums, or losing health insurance altogether.
Covered California is the largest state-run marketplace and more than 6.3 million Californians have had marketplace coverage since 2014. However, nearly two million Californians will see a sharp increase in their health insurance if the tax credits aren’t restored. Covered California offers affordable health insurance options for Californians whose income requirements exceed Medi-Cal eligibility requirements and who may not have access to health insurance through their employer, or who are not old enough to qualify for Medicaid.
A fact sheet published by Covered California reported that without the tax credits, low-income Californians would be hit hardest as individuals making less than $62,600 will see premiums rise from $97 to $182 per month. Older Californians aged 55 to 64 would see monthly premiums climb from $186 to $365. Premiums for Latino Californians would rise by 122%, for Asian and Pacific Islander Californians by 112%, and for Black Californians by 106%.
According to Covered California Chief Medical Officer Dr. Monica Soni, the program has seen “record levels of affordability” with enrollees increasing from an estimated 1.8 million enrolled to nearly 2 million in a single year.
“We were really heading in a particular trajectory…a lot of that has been revisited, I think, given…some of what’s coming out of the federal administration, some of the budgetary constraints that are happening across states and nationally as well,” Dr. Soni explained during a media briefing on Oct. 23.
Covered California premiums increased 10.3%, Dr. Soni shared, due to several factors including the cost of new medications on the market and due to the uncertainty around the enhanced premium tax credits. If action is taken in Congress regarding the tax credits, Covered California is prepared to immediately use lower rates for 2026.
While Dr. Soni acknowledged the increase in California’s premium, she applauded her team for their negotiations with health insurance plans. Compared to other states, California has one of the lowest increases in premiums as national averages are predicted to rise between 18% and 20%.
“So am I thrilled that we’re at 10.3%? No. Do I feel proud that we were able to get the number as low as we were? Yes, I am, and I’m extremely grateful our governor in the state of California, our legislature, appropriated $190 million to try to preserve some affordability,” Dr. Soni said.
With premium tax credits set to expire in December, California set aside $190 million to provide state subsidies for individuals earning up to 150% of the federal poverty level, which will guarantee that monthly premiums remain similar to 2025 levels for those with an annual income of $23,475 for an individual or $48,225 for a family of four.
Though health insurance premiums may be on the rise for those insured under Covered California, the state penalty for not having insurance is still in tact. Though the federal penalty was abolished, in California, the penalty for not having coverage the entire year will be at least $900 per adult and $450 per dependent child under 18 in the household. A family of four that goes uninsured for the whole year would face a penalty of at least $2,700.
“Even though we’re seeing shifts across the landscape in terms of affordability, the penalties have been in place before we had more affordabilities. I don’t see that California is going to back away from that. We know that folks will need to make different choices,” Dr. Soni said.
With millions of enrollees facing rising costs in premiums, coupled with those who may also rely on Cal Fresh benefits which are expected to be delayed due to the government shutdown, Dr. Soni recognized the struggle many will face as they decide between being uninsured and other important costs like food and bills.
For Covered California enrollees who may be facing food insecurity, Covered California launched an initiative this year called Beyond Covered: Grocery Support Program. The program helps individuals who are facing chronic health conditions and financial challenges access nutritious food. Eligible participants receive a special debit card for grocery purchases. Invitations are sent to potential participants, who are accepted on a first-come, first-served basis.
“Our Grocery Support Program is not going to be sufficient to fill the gaps, but frankly, philanthropy, other health plans, other pockets of money, are going to have to come together so that we don’t have folks suffering more than they already are,” Dr. Soni said.