News Summary
California is facing an average health insurance premium increase of 10.3% for 2026, the first double-digit hike since 2018. The rise follows a 7.9% increase in 2025 and is primarily due to expiring federal subsidies and rising healthcare costs. This change may lead to a potential 66% increase in premiums for 1.7 million enrollees. Despite a $190 million state allocation to support low-income residents, experts warn that many may drop coverage due to escalating costs, further impacting the insurance market.
California is set to see an average health insurance premium increase of 10.3% for the year 2026. This is the first double-digit hike in health insurance premiums since 2018 and comes after a preceding increase of 7.9% in 2025. The decision, announced by Covered California, reflects a growing concern among policymakers and consumers about rising healthcare costs and the impending expiration of enhanced federal subsidies that many Californians rely on.
The surge in premiums is attributed mainly to increased healthcare costs, the expiration of enhanced federal premium tax credits implemented during the COVID-19 pandemic, and ongoing unpredictability in the healthcare market. The expiration of these tax credits, which have significantly reduced the cost of health insurance for many, is predicted to result in a potential 66% increase in monthly premiums for approximately 1.7 million enrollees across the state.
In recent legislative efforts, Congress did not include funding for the continuation of enhanced premium tax credits in President Donald Trump’s “One Big Beautiful Bill Act.” This has further exacerbated the issue, impacting nearly 90% of enrollees who participate in the Affordable Care Act healthcare marketplace. If Congress fails to renew these credits, California is poised to lose around $2.1 billion in federal financial assistance, which could severely affect many consumers trying to afford health coverage.
Health insurance agents are raising alarms that clients will experience significant increases in premiums and reduced financial assistance, which will likely lead to higher out-of-pocket expenses. Although state officials allocated $190 million to sustain subsidies for low-income residents earning up to 150% of the federal poverty level, this funding is considered insufficient to address the anticipated shortfall. Consequently, approximately 600,000 Californians may drop their health coverage due to escalating costs and the loss of subsidies. This dropout could create a ripple effect, leading to even higher prices as the remaining pool of insured individuals may become less healthy.
Covered California anticipates that most premium costs will increase significantly due to a combination of factors, including tariffs on medications, rising medical device costs, and the prevalent use of high-cost prescription drugs. The overall trend echoes findings at the national level, where the average health insurance premium is projected to increase by 20%, significantly outpacing California’s hike.
In 2026, Covered California will offer health insurance plans through 11 different insurers statewide, though the exit of Aetna will reduce available options for roughly 21,000 enrollees. Open enrollment for health insurance coverage is expected to begin on November 1.
Experts in the field warn that if younger and healthier individuals opt out of health insurance coverage due to rising premiums, this could result in further increases for those who remain in the insurance pool. The final confirmed rates for insurance premiums will be announced later this year, with the new prices taking effect on January 1, 2026. In light of these developments, experts emphasize the urgent need for Congress to extend enhanced premium tax credits to help protect the financial well-being of consumers throughout California.
Deeper Dive: News & Info About This Topic
- Almanac News: Covered California Health Insurance Costs
- Wikipedia: Health Insurance in the United States
- San Francisco Chronicle: Covered California Premium Increase
- Google Search: Covered California Premium Increase
- Gold Rush Cam: Covered California Announces 2026 Rates
- Google Scholar: California Health Insurance Costs
- ABC 10: Covered California Premiums to Rise
- Encyclopedia Britannica: Health Insurance
- KIIS FM: Covered California Premiums to Rise
- Google News: California Health Insurance News
Author: Anaheim Staff Writer
Anaheim Staff Writer The Anaheim Staff Writer represents the experienced team at HEREAnaheim.com, your go-to source for actionable local news and information in Anaheim, Orange 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 major conventions at the Anaheim Convention Center, including NAMM and VidCon, exciting games at Angel Stadium and Honda Center, and developments at Disneyland Resort Our coverage extends to key organizations like the Anaheim Chamber of Commerce and Visit Anaheim, plus leading businesses in hospitality, entertainment, and innovation that power the local economy As part of the broader HERE network, including HERECostaMesa.com, HEREHuntingtonBeach.com, HERESantaAna.com, and HERELosAngeles.com, we provide comprehensive, credible insights into Southern California's dynamic landscape.
