Covered California Faces Major Premium Increases as Pandemic Subsidies Expire

Covered California health insurance premiums are set to increase significantly in 2026 as pandemic-era Enhanced Premium Tax Credits (EPTCs) face expiration. Approximately 82,000 Alameda County residents insured through Covered California are noticing sharp premium hikes, with some facing monthly payments exceeding previous zero-premium plans. These subsidies, which capped premiums at 8.5% of income and eliminated income limits for eligibility, were extended by pandemic relief legislation but are scheduled to end soon. The potential lapse of these credits could cause premiums to nearly double on average for over 1.7 million Californians currently receiving financial assistance, leading some families to consider dropping coverage despite penalties. Insurance brokers report premium increases as high as 150%, prompting affordability concerns and coverage discontinuations among some consumers. The rising premiums are motivating insured individuals to expedite preventative care services under current plans before renewal. Kaiser Permanente and Covered California emphasize that withdrawal of subsidies could result in higher out-of-pocket costs and a risk pool skewed toward higher-risk individuals, which may drive future rate increases. The broader impact includes potential strain on the healthcare system, with increased uninsured rates possibly leading to reduced services and rural clinic closures. Stakeholders acknowledge the dilemma faced by many, balancing affordability against essential coverage needs, amid ongoing federal deliberations regarding extension of these tax credits. The situation highlights critical regulatory and market challenges in sustaining health insurance accessibility post-pandemic subsidy period.