Covered California Proposes 10.3% Rate Increase for 2026

News Summary

Covered California has proposed a preliminary average rate increase of 10.3% for health plans in 2026. This rise may impact over 1.7 million enrollees who could see their premiums increase by 66% without the extension of federal premium tax credits. In response, California’s government has allocated $190 million to stabilize premiums for low-income residents. The changes underscore the urgent need for legislative action to maintain affordable healthcare access amid rising costs.

California – Covered California has announced a preliminary average rate increase of 10.3% for health plans in 2026, which may be alleviated if Congress opts to extend federal premium tax credits. The proposal is part of ongoing adjustments in response to rising healthcare costs and highlights the urgent need for legislative action to maintain affordable health coverage for residents.

This proposed rate increase comes at a time when Americans are already grappling with escalating costs across various sectors. Without an extension of the enhanced premium tax credits, an estimated 1.7 million enrollees in the state could face an average increase of 66% in net premiums. Such a drastic rise underscores the potential impact on California residents’ access to affordable health insurance.

Jessica Altman, executive director of Covered California, emphasizes the necessity for Congress to act swiftly. The health organization has seen record-high enrollment figures over the past four years, largely attributed to these tax credits, which help lower insurance costs for consumers. Covered California aims to continue this trend while negotiating with insurers to deliver valuable options to consumers.

The proposed rate adjustments are in direct correlation with the anticipated expiration of federal tax credits at the close of 2025, as well as the increasing costs associated with healthcare services. In light of this situation, Covered California has also managed to maintain California’s average rate increase at a lower level compared to the national average of 20%, illustrating efforts to enhance affordability.

State Support and Funding Initiatives

In a proactive approach to combat potential affordability issues, California’s state legislature and Governor Gavin Newsom have set aside $190 million for 2026. This funding is directed towards state subsidies for residents earning up to 150% of the federal poverty level, aiming to stabilize premiums for low-income enrollees.

The value of health insurance coverage continues to be a critical concern, especially as Covered California prepares for 2026 with 11 health insurance companies set to offer plans statewide. However, Aetna will be exiting the market, affecting nearly 21,000 enrollees who will need to select new coverage options within the marketplace.

California’s Commitment to Healthcare Access

Covered California maintains a strong commitment to improving access to healthcare and ensuring affordability for its residents. The organization’s leadership aligns with the objectives set forth by the Affordable Care Act, striving to protect the health interests of Californians while expanding coverage. The measures being implemented pave the way for significant strides in enhancing health insurance accessibility, as nearly 2 million Californians were covered in 2025.

Overall, the proposed rating increase and funding initiatives reflect Covered California’s ongoing efforts to address the challenges posed by rising healthcare costs, and signify the critical importance of securing continued legislative support for affordable health insurance options.

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