News Summary
California is facing an average health insurance premium increase of 10.3% for 2026, the first double-digit hike since 2018. Contributing factors include escalating healthcare costs and the expiration of enhanced federal subsidies. Without renewed financial support, 1.7 million enrollees may see their premiums surge by up to 66%. Although California officials have allocated $190 million to support low-income residents, experts warn that many may drop coverage, potentially leading to even higher premiums for those who remain insured. Open enrollment starts on November 1, 2025.
California is set to experience an average health insurance premium increase of 10.3% for the year 2026, marking the first double-digit hike since 2018. This increase comes on the heels of a 7.9% rise in premiums in 2025. The factors contributing to this upward trend include escalating healthcare costs, the impending expiration of enhanced federal subsidies, and increasing uncertainty in the market.
According to Covered California, the state’s health insurance exchange, inflation and the elimination of federal financial assistance are significant drivers behind the rise in costs. In particular, the phase-out of enhanced premium tax credits, which were put in place during the COVID-19 pandemic, is expected to impact approximately 1.7 million enrollees. Without renewed support, these individuals could see their monthly premiums skyrocket by as much as 66%.
This situation is exacerbated by Congress’s recent decision to omit funding for enhanced premium tax credits in the legislative package known as President Donald Trump’s “One Big Beautiful Bill Act.” Such a move could negatively impact 90% of Affordable Care Act enrollees in California, leaving many without the necessary financial support to afford their health insurance costs. If these enhanced tax credits are not reinstated, California risks losing approximately $2.1 billion in federal assistance for consumers.
Health insurance agents report that many clients are bracing for higher premiums coupled with reduced financial assistance. This situation is likely to lead to substantially higher out-of-pocket expenses for many families. While California officials have allocated $190 million to maintain subsidies for low-income residents earning up to 150% of the federal poverty level, this funding is seen as inadequate to meet the looming shortfall.
It is estimated that around 600,000 people may choose to drop their health coverage in light of increased premiums and diminished subsidies. This potential reduction in enrollees is anticipated to negatively impact the insured pool, as fewer healthy individuals will remain, ultimately driving prices higher for those who do stay enrolled.
In addition to rising premiums, Covered California reports that most premium costs are expected to escalate due to various factors, including increasing tariffs on drugs, escalating medical device costs, and the widespread use of expensive pharmaceuticals. By comparison, the national average premium increase is projected at 20%, significantly higher than California’s 10.3%.
Despite these challenges, the health insurance marketplace in California will continue to operate with 11 insurers offering available plans in 2026, even after Aetna’s exit, which will affect around 21,000 enrollees. Open enrollment for health insurance coverage is set to commence on November 1, giving California residents an opportunity to select their plans for the upcoming year.
Experts are voicing concerns that if younger and healthier individuals withdraw from coverage due to rising costs, premiums for those remaining in the health pool will inevitably rise. While Covered California expects to finalize premium rates later this year, these adjustments will officially take effect on January 1, 2026. Meanwhile, officials emphasize the importance of Congress extending enhanced premium tax credits to safeguard consumers from steep premium hikes.
Deeper Dive: News & Info About This Topic
- Almanac News: Covered California Premium Increase
- San Francisco Chronicle: Covered California Premium Increase
- Gold Rush Cam: Covered California 2026 Rates
- ABC10: Covered California Premiums to Rise
- KIIS FM: Covered California Premiums Increase
- Wikipedia: Health Insurance in the United States
- Google Search: Health Insurance Premium Increase California
- Google Scholar: California Health Insurance
- Encyclopedia Britannica: Health Insurance
- Google News: California Health Insurance 2026
Author: STAFF HERE BEVERLY HILLS WRITER
The Beverly Hills Staff Writer represents the experienced team at HEREBeverlyHills.com, your go-to source for actionable local news and information in Beverly Hills, Los Angeles County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the Rodeo Drive Concours d'Elegance, the Beverly Hills artSHOW, Concerts on Canon, and holiday celebrations throughout the city. Our coverage extends to key organizations like the Beverly Hills Chamber of Commerce and Visit Beverly Hills, plus leading businesses in luxury fashion, hospitality, and entertainment that drive the local economy. As part of the broader HERE network, including HERELosAngeles.com, HERESantaAna.com, HEREHuntingtonBeach.com, and HERECostaMesa.com, we provide comprehensive, credible insights into Southern California's dynamic landscape.
