News Summary
California is bracing for a 10.3% increase in health insurance premiums in 2026, the first double-digit rise since 2018. The hike follows a 7.9% increase in 2025, raising concerns about affordability as enhanced federal subsidies expire. Covered California’s Director warns that around 1.7 million enrollees could see premiums skyrocket by 66% without Congressional action. With state funding falling short, the looming financial strain could force approximately 600,000 individuals to drop their health coverage, compounding challenges for those who remain insured.
California is set to experience an average health insurance premium increase of 10.3% in 2026, the first double-digit rise since 2018. This announcement from Covered California follows a 7.9% increase that took effect in 2025, raising concerns among consumers and healthcare experts alike. The primary causes for this hike are attributed to rising healthcare costs, uncertainties in the insurance market, and the expiration of enhanced federal subsidies that were initially enacted during the COVID-19 pandemic.
Covered California’s Director has emphasized that inflation and the expiration of federal financial assistance are fundamental factors causing these increased premiums. The end of enhanced premium tax credits could lead to a staggering 66% rise in monthly premiums for approximately 1.7 million enrollees if Congress does not take action. This situation is particularly troubling for many participants in the Affordable Care Act, as 90% of enrollees could be affected by the failure of Congress to fund these vital tax credits.
The potential loss of these subsidies is projected to impact the state significantly, with California facing a risk of losing about $2.1 billion in federal assistance designed to help consumers afford their premiums. Consequently, many individuals may experience heightened financial burdens, as indicated by health insurance agents noting that clients will face increased premiums and reduced assistance in 2026.
To address the issue for lower-income residents, state officials have allocated $190 million to maintain subsidies for individuals earning up to 150% of the federal poverty level. However, this funding is expected to fall short of meeting the growing demand, exacerbating the financial strain on low-income households. Experts warn that around 600,000 individuals might drop their health coverage due to rising costs and dwindling subsidies, which could lead to further premium increases caused by a less healthy enrollee pool.
Covered California anticipates that most premium costs for insurance will increase significantly due to rising drug tariffs, escalating medical device prices, and the prevalent use of expensive pharmaceuticals. While California’s average premium increase is 10.3%, national projections suggest a 20% rise in premiums, underscoring the challenges insured individuals will face moving forward.
Despite the exit of Aetna, which affects around 21,000 enrollees, Covered California will provide plans from 11 insurers state-wide in 2026. The annual open enrollment period for health insurance coverage usually starts on November 1, allowing individuals to select their plans for the upcoming year.
Experts are particularly concerned that younger and healthier individuals may opt out of insurance coverage altogether, resulting in increased premiums for those who remain in the insurance pool. The final premium rates are expected to be confirmed later this year, with the new rates taking effect on January 1, 2026. The urgency for Congress to extend enhanced premium tax credits is underscored by the potential for increased financial pressure on consumers.
Deeper Dive: News & Info About This Topic
- Almanac News: Covered California Health Insurance Will Cost More in 2026
- San Francisco Chronicle: Covered California Premium Increase
- Sierra Sun Times: Covered California Announces 2026 Rates
- ABC10: Covered California Premiums to Rise in 2026
- Encyclopedia Britannica: Health Insurance
Author: STAFF HERE HOLLYWOOD
The Hollywood Staff Writer represents the experienced team at HEREHollywood.com, your go-to source for actionable local news and information in Hollywood, Los Angeles County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the Hollywood Bowl summer concerts, the Hollywood Christmas Parade, film premieres at TCL Chinese Theatre, and festivals at the Magic Castle. Our coverage extends to key organizations like the Hollywood Chamber of Commerce and Visit Hollywood, plus leading businesses in entertainment, dining, and tourism that define the local economy. As part of the broader HERE network, including HERELosAngeles.com, HEREBeverlyHills.com, HEREAnaheim.com, and HEREHuntingtonBeach.com, we provide comprehensive, credible insights into Southern California's dynamic landscape.
