The upcoming open enrollment period for health insurance in California reveals alarming news for many enrollees. Starting January 1, 2026, premiums for plans purchased through Covered California are set to increase dramatically, with average monthly costs expected to rise from $923 to nearly $3,264 for numerous participants. This steep hike is primarily attributed to the expiration of expanded tax credits established during the COVID-19 pandemic under former President Joe Biden.
Tara and Todd Nicklous, a couple from Castro Valley who operate a real estate appraisal business, expressed their shock upon learning about the new premium rates. “My gut sunk,” said Tara Nicklous, 56, who has been relying on costly treatments for a blood cancer she has battled for over a decade. The couple had previously qualified for coverage due to the temporary tax credits, which are now at the center of a stalemate in Congress, where Democrats demand their extension amid ongoing federal funding negotiations.
Impact of Premium Increases on Californians
The alarming projections from Covered California indicate that approximately 2 million residents who rely on this marketplace for federally subsidized health insurance will face a sharp increase in costs. Many individuals, particularly those in their 50s and 60s who are not yet eligible for Medicare, will be significantly affected. According to the Urban Institute, around 400,000 Californians may lose their eligibility for Covered California, with an estimated 175,000 potentially priced out of insurance coverage altogether.
Rep. Eric Swalwell, a Democrat representing the East Bay, criticized Republicans for their role in the situation. He stated, “For weeks, Democrats have been warning that leaving health care out of this funding bill would raise costs for millions of Americans. Now, those consequences are becoming reality.”
In anticipation of the tax credit expiration, health insurers in California are also planning to increase premiums by an average of 10% for 2026, reflecting rising healthcare delivery costs and increased demand for expensive medications. Kaiser Permanente, the state’s largest private insurer, will raise its rates by 7.1% for Covered California policies, while Anthem Blue Cross has announced a 14.5% increase.
Consequences for Health Care Access
The sharp rise in premiums poses significant challenges for patients, especially those like Tara Nicklous who require ongoing medical treatment. Tara noted that her hospital recently billed Kaiser Permanente over $5 million for T-cell therapy, underscoring the critical nature of maintaining health insurance. With the impending cost increases, she and her husband are preparing to tighten their budget. “We’re changing our shopping and our eating habits,” Tara remarked, indicating that they will likely forgo vacations and look for more affordable options.
The potential loss of insurance coverage is concerning for many, particularly as patients are likely to delay preventative care due to increased costs. John Murphy, Chief Medical Officer at La Clínica de La Raza, highlighted the danger of patients avoiding necessary health services. “Patients put off preventative care when it’s too expensive. Eventually, they’ll land in a hospital emergency room,” he stated.
California officials are aware of the impending crisis and plan to provide limited assistance. Approximately $200 million in state tax credits will be available for low-income residents earning slightly too much to qualify for Medi-Cal, the state’s version of Medicaid. This measure aims to cushion some of the financial impacts from the changes to the federal tax credits.
As open enrollment begins on November 1 and continues through January 31, 2026, Covered California has begun notifying enrollees of the expected price increases. The fallout from the expiration of tax credits and rising premium rates is poised to reshape the landscape of health insurance for many Californians, leaving them to navigate an uncertain future in their healthcare choices.
