SF Chronicle: Health premiums could skyrocket for 1.7 million Californians in federal shutdown standoff
By Catherine Ho and Alexei Koseff
Nearly 1.7 million Californians could soon face steep increases in health insurance premiums if Congress — deadlocked and on the brink of triggering a government shutdown — does not extend federal subsidies that help them pay for their monthly premiums.
The subsidies, known as enhanced premium tax credits under the Affordable Care Act, first became available in 2021 under the pandemic-era American Rescue Plan Act and are slated to expire Dec. 31. They benefit residents who buy health plans through Covered California, the insurance marketplace for people who don’t get insurance through their employer, Medicare or Medi-Cal. Most people who buy Covered California plans are lower- or middle-income earners and receive subsidies, which vary based on income level, to help offset the cost of premiums.
Congressional Democrats are pushing for an extension of the tax credits to be included in a budget bill that must be finalized Tuesday to avoid a government shutdown.
Lawmakers could also make a separate deal to extend the tax credits, but the prospects are poor in the sharply divided, Republican-majority Congress.
“We’re on the verge of health care costs spiking for the 20 million Americans who rely on Affordable Care Act coverage,” said Sen. Alex Padilla, D-Calif. “That’s not a next-year problem. That’s a right-now problem. Open enrollment is about to begin, those premiums are about to be set, and we need to address it immediately.”
Whether Congress acts this week is timely because open enrollment for Covered California begins Nov. 1, and Covered California must have 2026 subsidies finalized and implemented as soon as possible so they can send renewal notices to enrollees in October. Renewal notices include pricing information.
If Congress does not extend the tax credits as part of a deal to avert a government shutdown, Covered California enrollees trying to make open enrollment decisions for 2026 coverage could face uncertainty over how much their premiums will cost.
Of the roughly 1.94 million Californians enrolled in Covered California plans, 1.67 million — about 86% — receive the enhanced premium tax credits.
As many as 400,000 enrollees could be priced out of coverage if the tax credits are not extended, according to Covered California. On average, premiums would increase $125 per month per person, or a 97% increase in monthly premium costs, the agency estimates.
The problem could be particularly acute for people in their 50s and 60s who do not yet qualify for Medicare and may already pay thousands of dollars per month for insurance, said Anthony Wright, executive director of the health care consumer advocacy group Families USA.
Price increases could also hit consumers harder in Northern California, where health care tends to be more expensive than in Southern California, largely because of hospital consolidation.
Financial assistance “is just more imperative in a high-cost place like California,” Wright said.
Bay Area counties would see greater premium increases than the state average, according to Covered California. Here is how much monthly premiums would go up in each county, on average, according to their estimates:
- San Francisco: $177
- Contra Costa: $163
- Alameda: $141
- Santa Clara: $156
- San Mateo: $200
- Marin: $200
- Napa: $171
- Sonoma: $175
- Solano: $148
Covered California members will be receiving notices in October that will include the latest pricing information, and can make enrollment changes for 2026 through Dec. 31.
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