California Alerts ACA Enrollees of Potential Cost Increases
California is preparing to inform those enrolled in the Affordable Care Act (ACA) marketplace that their health insurance costs could significantly increase in the coming year unless Congress decides to extend financial subsidies designed to make healthcare more affordable.
Experts warn that the number of uninsured individuals in the country could grow if lawmakers do not renew tax credits established during the COVID-19 pandemic. These credits, introduced in 2021, were meant to enhance ACA subsidies.
A recent poll by KFF revealed that over 75% of adults, including a notable 59% of Republicans, support renewing these tax credits for low- and moderate-income individuals. KFF is an independent health information nonprofit that operates KFF Health News, which publishes California Healthline.
These extra credits have made health insurance premiums more affordable, benefiting millions and contributing to a decrease in the nation’s uninsured rate.
Recently, former President Donald Trump hinted at a possible healthcare deal. Georgia Republican Rep. Marjorie Taylor Greene, known for her backing of the “Make America Great Again” movement, expressed her dismay over the potential doubling of health insurance premiums if the tax credits expire.
Currently, Republicans prefer to address a government shutdown before discussing the credits, whereas Democrats seek to include the issue in a shutdown resolution.
If the additional subsidies are not extended, many enrollees in the marketplace could see their costs rise by over 100%. This would impact more than 24 million ACA members nationwide, including nearly 90% of the 2 million people enrolled in Covered California, the state’s largest health insurance exchange. Experts predict that the loss of these enhanced credits could push millions to drop their insurance plans, with a significant number likely based in California.
The federal government shutdown is mainly due to a disagreement between Democratic lawmakers advocating for the tax credits and Republicans who oppose the associated costs and, in many cases, the ACA itself. One estimate suggests that renewing the credits could cost around $350 billion over a decade. Democrats see this as a strategy to reclaim the House in the upcoming midterm elections, similar to their approach after the GOP’s failed attempt to repeal the ACA in 2018.
The enrollment period for the 2026 ACA plans begins on November 1, and many enrollees are uncertain about whether their premiums will soar next year.
Jessica Altman, the executive director of Covered California, highlighted the necessity for people to understand their health plan options. In July, Covered California alerted enrollees about the impending expiration of their enhanced federal subsidies to prepare them for possible cost increases.
In one particular case, middle-income enrollee saw their entire $200 monthly subsidy potentially vanish. Another could face losing a third of their total $600 monthly aid, illustrating the stark changes approaching.
The additional tax credits have been crucial in supporting many middle-income individuals who previously did not qualify for original subsidies and have increased support for others.
Senate Majority Leader John Thune recently indicated a willingness to discuss extending the tax credits but mentioned that any agreement would need to include some reforms, possibly reducing the number of individuals eligible for the increased aid based on income levels.
Without these enhanced subsidies, Covered California estimates that enrollees could see average premium costs rise by 97%. However, the increases will vary significantly—some may experience smaller hikes, while others could see their costs triple. Rural residents in certain counties are expected to face the largest increases.
Experts warn that ending the enhanced subsidies could lead to more people accumulating medical debt and increase the number of uninsured or underinsured individuals, threatening families’ economic stability.
Covered California projects that about 400,000 people may leave the exchange and risk being uninsured, a situation that could exacerbate stress on an already strained healthcare system.
Although California is better positioned than states like Florida, Texas, and Georgia—where millions flocked to ACA marketplace plans due to the lack of Medicaid expansion—the state has only about $190 million allocated to help mitigate the loss of enhanced premium subsidies in 2026. This funding primarily covers enrollees’ deductibles and is a fraction of the substantial aid currently provided by expiring tax credits.
Rachel Linn Gish from Health Access California noted that many are likely to be shocked by the coming changes, prompting difficult decisions about their finances, such as cutting back on essentials or going without insurance.
Soon, Covered California will send out official notices regarding open enrollment and the specifics of next year’s coverage. Although they typically release these letters on October 1, they have delayed the announcement to mid-October in hopes of receiving clarity from Washington. Altman emphasized the importance of congressional action to avoid delivering unwelcome news about steep premium increases.
As it stands, uncertainty looms, and many enrollees may face tough choices ahead.
