Nationwide, many people are dealing with continuous changes to health insurance and constant price increases. Insurance prices became unmanageable for thousands of Californians after Congress failed to extend federal subsidies this year. The subsidies, known as enhanced premium tax credits, had increased financial aid across the marketplace.
The enhanced Affordable Care Act (ACA) premium tax credits expired on Dec. 31, 2025, causing higher insurance premiums to take effect in January after months of debate in Congress that resulted in the country’s longest-ever government shutdown. Now, fewer people qualify for federal assistance with their monthly premiums.
Most Californians, 81 percent, who sign up for Obamacare during open enrollment receive their tax credits then. For them, average premiums rose $77 a month, from $187 to $264, according to data from the Centers for Medicaid and Medicare Services.
That’s an additional $924 a year spent on premiums alone.
In an interview with NBC, Los Angeles resident Marc Silverman said his insurance doubled this year, costing him 800 a month for a minimal plan.
He has no complaints about his coverage except the price. As he points out, “it’s not covering everything… every time you go, you pay just to see the doctor.”
His wife needs biannual breast exams after her cancer diagnosis, but Silverman says insurance will cover only one exam per year. They pay for the other exam out of pocket, which costs them $2,000 a month.
Before the enhanced tax credits expired, they increased federal aid for everyone and made it available to more enrollees. Last year, households with incomes above $63,840 for a single person, or $132,000 for a family of four, or 400 percent of the federal poverty level received federal subsidies for Affordable Care Act coverage. Now, Americans who make just a single dollar above that benchmark are ineligible for aid, marking the return of the Affordable Care Act’s infamous “subsidy cliff.”
Premiums will continue to rise next year, according to initial rate filings from insurance companies. Last year, insurers anticipated a decline in enrollment when tax credits expired, so they raised premiums by 7.1 percent to 21 percent.
Rate hikes for next year will likely fall into a similar range. In 2025, before the tax credits expired, rate increases were generally smaller, ranging from 1.8 percent to 15.4 percent.
California allocated $190 million to lessen the blow of lost tax credits with state-funded substitutes. But the state subsidies are only available to those making below $23,475 a year, 165 percent of the federal poverty level. Next year, that investment will grow to $300 million, expanding financial aid to one in four Covered California enrollees, according to the Kaiser Family Foundation..
California’s new subsidies for next year are estimated to provide financial assistance to an additional 200,000 people, according to Covered California spokesperson Noah Glick. But even so, Glick said in an email, “The state subsidy program is not enough to fill the gap left by the expiration of enhanced federal subsidies.”
