California this week plans to notify Affordable Care Act market participants that their costs could rise sharply next year unless Congress expands subsidies to help people buy health insurance.
Health analysts say the nation the uninsured population will increase significantly unless federal lawmakers agree to extend the Covid-era tax breaks that Congress authorized in 2021 on top of the ACA subsidies.
They are also popular. According to KFF surveyMore than three-quarters of adults, including 59% of Republicans, say they want Congress to provide expanded tax breaks for people with low and moderate incomes. KFF is a nonprofit health information organization that includes KFF Health News, publisher of California Healthline.
The additional credits lowered insurance premiums, helped millions of Americans afford the cost of ACA insurance, and lowered premiums. national uninsured rate.
Last week, President Donald Trump proposed a healthcare deal may be in the works. And Republican U.S. Rep. Marjorie Taylor Greene of Georgia, a longtime supporter of the Make America Great Again movement, appeared to support extending the tax cuts, saying post on social network that she is “absolutely disgusted that health insurance premiums will double if the tax breaks expire this year.”
However, Republican leaders want reopen the government first, while Democrats want to negotiate a deal in a bill that would end the shutdown.
If the additional subsidies are not extended beyond this year, the amount that subsidized consumers pay for their ACA health plans is expected to increase. more than doubled on average. This would be a painful cost of living increase for most of the country's more than 24 million market participants, including nearly 90% of the nearly 2 million people in Indoor California. largest public health insurance market. Analysts say the loss of the expanded credits will lead to millions of people dropping insurance across the country, including hundreds of thousands in California.
The federal government shutdown is driven primarily by differences between Democratic lawmakers who want to extend the tax cuts and Republicans who oppose the cost and, in many cases, the landmark health care law itself. According to one estimate, $350 billion price tag more than 10 years. Democrats hope their stance will help them take back the House in next year's midterm elections, as they did in 2018 after the failed GOP attempt to repeal the ACA.
The 2026 ACA health plan open enrollment season begins Nov. 1 in most states, including California, and enrollees still have no idea whether their premiums will rise exorbitantly next year.
“People should be able to buy health insurance plans,” says Jessica Altman, executive director of Covered California. “We are at a decisive moment.”
In July, Covered California sent notices to members about an increased portion of their federal subsidy that was expiring. The idea was to alert them to how much their costs could rise if they decided to keep the same health insurance plan next year.
In one case, a common scenario for middle-income applicants, entire subsidy of $200 it will take a month. Another enlisted stood lose one third According to sample notices provided by Covered California, the total amount of assistance is $600 per month.
The additional tax breaks provided financial relief to many middle-income health plan purchasers who were not eligible for the original subsidies, and also increased the amount of assistance for many others.
Senate Majority Leader John Thune in late September left the door open to extending tax breaks that would otherwise expire, but said “this needs to be accompanied by some reforms.”
These could include changes that would reduce the number of participants eligible for additional income-based financial assistance and reduce or eliminate zero-contribution plans that have become widely available with the advent of additional tax credits.
If the expanded subsidies end, Covered California projects that its members receiving the expanded subsidies would see their premiums rise by an average of 97%. However, the increase will not be carried out in the same way. Depending on age, income and location, some people will see a smaller jump, while others may see their out-of-pocket costs triple, Altman said.
VillagersParticularly in northern and eastern counties and along the Monterey coast, Covered California projects that there will be a disproportionate increase in costs. Enrollees with incomes over $62,600 will lose financial assistance altogether, leaving some people ages 55–64 with premium bills as high as 30% of your income.
Without increasing subsidies, “we're going to see more people have medical debt, more people either uninsured or underinsured,” says Carey Sanders, senior policy director for the nonprofit California Pan-Ethnic Health Network. “And that’s the fastest way for families to lose economic security.”
Covered California estimates that about 400,000 people will leave the exchange and will likely remain uninsured. And that, health experts and advocates warn, will only increase the strain — in the form of more crowded emergency rooms and community clinics — on an already strained health care system.
But the proportional impact in California will be smaller than in some Republican-led states such as Florida, Texas and Georgia. Because those states did not support the ACA's Medicaid expansion, millions of residents flocked to Obamacare marketplace plans, especially after expanded tax breaks made coverage vastly more affordable.
From 2020 to 2025, ACA Marketplace Registration in Florida grew nearly 2.5 times to 4.7 million—more than twice as many as in California. In Texas, it more than tripled to just under 4 million. Georgia also tripled to 1.5 million.
California has about $190 million in state funds for 2026 to offset the loss of expanded premium subsidies. But that money is now used to offset enrollees' deductibles, coinsurance payments and other out-of-pocket expenses. And this is a drop in the bucket compared to $2.5 billion per year in financial assistance Covered California participants currently receive tax credits that are expiring.
“A lot of people will be shocked by what they're faced with,” said Rachel Lynn Gish, a spokeswoman for the nonprofit advocacy group Health Access California. “They're going to have to make some very difficult choices: 'Do I cut back on groceries or rent, or will I remain uninsured?'”
Very soon, Covered California and the other ACA marketplaces will have to send out official open enrollment letters letting participants know exactly what to expect from coverage in 2026.
Covered California typically sends out these letters on Oct. 1, but delayed them until around Oct. 15 in hopes Washington would provide clarity. Currently, Covered California has two versions of the frozen letter: one with the tax credit extension and one without.
Altman says she hopes Congress will act before sending a massive premium increase. But she may have no choice.
“This is the default here, as is what will happen if nothing changes,” Altman says. “Unfortunately, this is also the worst-case scenario.”
She worries that if Covered California tells participants that their rates will likely rise sharply, it will discourage many, even if Congress later agrees to extend the loans.
