Loss Of Subsidies Could Strip Health Coverage From 400,000 Californians

If Congress fails to extend federal health subsidies before the end of the year, "we do estimate as many as 400,000 of our current enrollees could be priced out of the coverage they have today," said Jessica Altman, Covered California Executive Director.

The federal subsidies, known as enhanced premium tax credits, were expanded during the pandemic to make monthly health insurance more affordable for millions of Americans. Without congressional action, the average individual on Covered California could see premiums nearly double when the credits expire.

Altman explained that Covered California serves people who don’t get coverage at work and don’t qualify for Medi-Cal or Medicare. The Affordable Care Act’s premium tax credits help those consumers afford monthly premiums. In recent years, the federal “enhanced” premium tax credits lowered costs for lower-income enrollees and, for the first time, making many middle-income consumers eligible too.

Those enhancements are set to expire on December 31, 2025, unless Congress acts.  Altman noted that for lower-income households, a $20 monthly premium could become $40, while middle-income families could see average monthly increases of about $500. “The result would be fewer people able to keep coverage,” she said.

Open enrollment for Covered California began on November 1. A record of nearly 2 million Californians, including more than 350,000 new enrollees in 2025 are on Covered California. In Sacramento County, more than 60,000 people have insurance through Covered California according to California Health Care Foundation's Covered California dashboard. 

A report from California's Health Benefit Exchange noted that the number of Black enrollees grew by 53% between January 2020 and January 2025, a rate that outpaced the statewide growth rate of 29% during the same period. Without the enhanced tax credit, the Black community will be disproportionally impacted.

Keisha Thompson currently pays $128 per month for her health insurance through Covered California. She manages hypertension and lupus and receives ongoing treatment, including quarterly check-ins, routine labs, and medications that help control her blood pressure and manage lupus flares.

Without the enhanced subsidies, her monthly premium would more than double to nearly $300 per month, an increase she said would force her to choose between paying for coverage or paying rent.

“If my premium doubles, I can’t keep this plan,” Thompson said. “I would have to put off labs, stretch out my medication, and hope nothing goes wrong.” She explained that before getting insured, she avoided regular care for nearly a decade because of cost, leading to an emergency hospitalization in 2019. “I really do not want to  go back to that,” she said. “But I might not have a choice.”

On Nov. 7, Oak Park residents gathered inside the small and intimate Classy Hippie Tea Co. to talk about what that looming change could mean for families and small business owners. The discussion, hosted by Covered California and community partners, brought together state health officials and nonprofit leaders to answer questions about open enrollment, health care affordability, and equity.

The Oak Park conversation reflected a larger effort by Covered California to bring information into trusted community spaces, particularly neighborhoods of color where residents are more likely to be uninsured and where outreach from local messengers often makes the biggest difference.

Altman said the Affordable Care Act has been crucial in expanding health insurance across the state

With reduced premium tax credits, monthly premiums are projected to rise by 97 percent on average for more than 1.7 million Covered California enrollees. This includes 160,000 middle-income consumers receiving the federal enhanced premium tax credits who stand to lose eligibility in 2026.

“They haven’t just made health care more affordable for people who already had it,” Altman said. “They’ve helped people gain coverage for the first time. Nationally, enrollment in marketplaces has doubled. Here in California, we’ve seen incredible increases in coverage, decreases in the uninsured rate, and, importantly, progress in closing racial disparities and creating greater equity in the process.”

Without “enhanced” federal subsidies, California will focus on providing financial assistance to the most vulnerable customers in 2026.  The state has allocated $190 million to provide state-funded tax credits for individuals earning up to 150 percent of the federal poverty level (up to $23,000 for an individual or $48,000 for a family of four).

Dr. Dawnté Early, president and CEO of United Way California Capital Region, recounted that before the Affordable Care Act, emergency rooms often were filled with people who delayed care because they couldn’t afford preventive visits. That led to “higher mortality” and “higher comorbidity,” with stark examples in maternal and infant health, she said. Coverage expansion helped reverse those trends, but losing the federal subsidies would ripple across the system.

“Even if you don’t care about those of us who are living in poverty … you should care about your own rates,” Early said, arguing that the system works better and costs less overall when more people are insured.

United Way also sees the link between health care and economic stability in its free tax-preparation program, which brought “over $40 million in tax refunds” back to local households in five years. Filing taxes, Early noted, can be essential to accessing premium tax credits.

Image

Dr. Monica Soni, left, of Covered California speaks during a Nov. 7 community discussion. Next to her are Dr. Dawnté Early, center, president/CEO of United Way Capital California Region, and Covered California Executive Director Jessica Altman. Roberta Alvarado, OBSERVER

Dr. Monica Soni, chief medical officer of the Health Equity and Quality Transformation Division for Covered California, described what broader coverage has meant inside clinics and hospitals: fewer late diagnoses, more preventive care, and people staying healthier and working. She recounted seeing patients lose work because untreated conditions spiraled — avoidable harm when coverage is within reach. The prospect of a sudden premium jump — “a 97% increase” — raised concerns about people in ongoing treatment who might be forced to pause care.

Altman and Soni spotlighted how every health plan offered through Covered California includes comprehensive behavioral health services, including treatment for substance use disorders. They noted that utilization of those services has shifted dramatically since the pandemic, with “over 70% of all behavioral health visits now happening through telehealth,” Soni said. Meeting people where they are — whether at home, in churches, barbershops, or community clinics — has helped reduce stigma and expand access to care.

Early pointed to community-driven solutions that work: delivering information and services through trusted spaces such as barbershops, salons, and churches; and pairing health care with housing and navigation support. Through CalAIM-aligned efforts, United Way housed a thousand individuals in the past two years including more than 400 children, according to Early. She also highlighted that some health plans are now investing in things like security deposits and community health workers. The throughline: health outcomes improve when social needs are addressed alongside clinical care.

Altman said Covered California works with roughly 14,000 enrollment partners statewide — agents, clinics, and community-based organizations — to reach people directly at events such as farmers markets to health fairs. Those partners also can help residents enroll in Medi-Cal, Medicare, or county-based programs when those are the right fit.

If you have a card in your wallet, Soni said, use it, reminding people that a long list of preventive services carry no copay or coinsurance: cancer screenings (including colorectal screening starting at 45 and updated breast-screening guidance), diabetes and cholesterol screening, blood pressure checks, and recommended vaccines during respiratory-virus season. “Everybody should be utilizing those services and have a relationship with a primary-care doctor for other underlying needs,” Soni said.

She added that data show that particularly for Black patients, having a clinician who shares their background can increase life expectancy. “In a community with a high density of Black folks, if you actually have a high density of Black primary-care doctors, the whole community lives longer,” she said. “That’s not preference; that’s not just something we would like to have. It’s a life-saving intervention for us.”

 Open enrollment runs through Saturday, Jan. 31; those who enroll by the end of December will be covered for the calendar year.

 Options are available at CoveredCA.com, where applicants can compare plans and determine if they qualify for financial help.

To find a certified enrollment counselor or agent nearby, Californians can visit coveredca.com/find-help.

This project was supported by the USC Annenberg Center for Health Journalism, and is part of “Healing California”, a yearlong reporting Ethnic Media Collaborative venture with print, online and broadcast outlets across California.