California Health Insurance Enrollment Declines Amid Subsidy Cuts
California's private health insurance marketplace recently reported a slight decline in enrollment levels, remaining close to previous years despite the cessation of federal subsidies. Nearly 1.9 million Californians renewed or newly selected plans during the latest enrollment period, marking a 2.7% decrease from the prior year.
Consumers increasingly favor bronze-level plans, which offer lower premiums but higher out-of-pocket costs, covering 60% of medical expenses. According to Covered California's data, one-third of new enrollees opted for bronze plans in 2026, compared to one-fourth the previous year. Notably, 130,000 Californians who renewed their coverage transitioned from silver or higher-tier plans to bronze.
Jessica Altman, executive director of Covered California, commented on the trend, “Many Californians see the value in remaining covered, but they had to make sacrifices and shift to lower-tier plans.” The increased popularity of these plans highlights the commitment to health coverage, albeit with potential financial compromises.
Despite the commitment, the appeal of bronze plans raises concerns about access to care. Miranda Dietz from the UC Berkeley Labor Center remarked on the high deductibles and copays, which may deter individuals from seeking necessary medical services. “Those out-of-pocket costs do impact people’s decisions to get care, so that’s worrisome as well,” Dietz noted.
Changes in subsidy eligibility have significantly affected middle-income earners, with many shifting to lower-premium plans or exiting the marketplace altogether. Those earning above 400% of the federal poverty level see no premium assistance, resulting in a 22% plan discontinuation among middle-income enrollees and a 59% drop in new signups from this group.
The longevity of current enrollments remains uncertain until premium payments are due. Covered California expects a clearer picture of patterns by April, but there is limited information on whether individuals exiting the marketplace have secured alternative insurance. Historical data indicates that 10% to 14% of those canceling marketplace plans become uninsured.
The expiry of enhanced premium subsidies, part of the federal COVID-19 response, has elevated premiums by 10% on average. However, lower-income individuals still qualify for standard federal aid, supplemented by $190 million in state-funded tax credits in 2026 for those earning up to 165% of the federal poverty level. Surveys reveal that cost remains a significant concern, emphasizing the need for policymakers to prioritize affordable health care solutions.