In 2026, millions of Californians will face a noticeable rise in the cost of health insurance. Covered California — the state’s health insurance marketplace — has announced its first double-digit premium increase since 2018.
For many, this is alarming news, because it’s not just about percentages, but about how much families and individuals will be paying each month for access to doctors, medications, and hospitals.
According to Covered California’s Executive Director Jessica Altman, this isn’t a coincidence but rather a convergence of several factors that have put upward pressure on the market. Rising health care costs, the expiration of federal subsidies, and political uncertainty have all combined to push prices higher.
Why Are Premiums Going Up?
The main reason is that health care services are becoming more expensive than inflation. In recent years, insurers projected annual spending increases of around 8%. This comes from the rising price of drugs, higher wages for medical staff, and the need to invest in new technologies.
“Health care has always been a costly sector of the economy, but today we are seeing an acceleration of spending growth,” Altman noted. For consumers, this means base premiums are going up even if the scope of services remains the same.
The second factor is the end of enhanced federal subsidies that helped lower costs for most enrollees. These subsidies were introduced by Congress during the COVID-19 pandemic to ensure millions of people wouldn’t lose coverage.
What Changed After the Pandemic?
During the pandemic, the federal government took unprecedented steps: enhanced tax credits made insurance affordable for a record number of Americans. Thanks to this, the number of Affordable Care Act (ACA) enrollees nearly doubled nationwide — from 12 million to 24 million people.
In California, this meant that over 90% of Covered California participants received government assistance. Many were paying just tens of dollars per month instead of hundreds. But now, as those subsidies expire, bills are climbing again.
President Donald Trump signed a new spending and tax reform bill — called the “One Big Beautiful Bill Act.” However, this legislation does not include funding to continue the expanded tax credits. That means millions of people will be left to deal with the real cost of insurance on their own.
How Will This Impact Families and Individuals?
Experts estimate premium hikes in California will average 10% to 12% across the market. For some groups, this could mean hundreds of dollars in extra costs per year.
For example:
- A family of four earning above subsidy thresholds could pay an additional $200–$300 per month.
- A single working adult in midlife might see a $50–$70 monthly increase.
- Younger people on basic plans may feel less of an impact, but still notice higher bills.
Costs will also vary by county and by plan.
Politics and Uncertainty
The political landscape plays a huge role. America’s health insurance system depends heavily on federal policy. Any shift in Congress or the White House directly impacts what people pay for their coverage.
Supporters of subsidies argue that letting them expire is a blow to millions of middle-class families, many of whom may drop coverage entirely. Opponents insist that constant expansion of aid balloons the federal budget and creates artificially low premiums that don’t reflect the true cost of care.
As a result, the market faces uncertainty: insurers don’t know what level of government support to expect, and consumers can’t be sure if they’ll be able to afford coverage next year.
What’s Next?
The situation looks concerning, but not hopeless. Covered California continues working to keep insurers in the market and maintain competition. “Having choice and competition helps limit premium increases,” Altman emphasized.
California may also explore new state-level programs to offset some of the increases for vulnerable groups. But for now, no concrete measures exist, meaning residents should prepare for higher bills in 2026.
What Should Californians Do?
Experts recommend several steps:
- Review your plan — switching insurers or plan types may save significant money.
- Check subsidy eligibility — while enhanced federal aid is ending, other assistance programs remain for low-income residents and certain families.
- Stay updated with Covered California — the marketplace publishes tools and updates to compare rates.
- Consider employer coverage — workplace insurance may be cheaper than individual plans for some.
- Don’t go uninsured — the cost of being without coverage can be far greater in case of illness or emergency.
Why It Matters for Everyone
Health care isn’t just about personal well-being — it’s tied to the economic stability of the entire state. When more people go uninsured, the burden on emergency rooms and hospitals increases. Eventually, that raises costs for California’s budget and taxpayers.
This makes rising premiums not only a household issue, but a community-wide challenge.
In 2026, California will see its first double-digit health insurance premium increase in eight years. It’s driven by rising medical costs, the expiration of federal subsidies, and political uncertainty.
Residents will have to pay more, creating stress on family budgets. Yet the state still has tools to soften the blow — if lawmakers act.
One thing is certain: health insurance will be a major issue in 2026, both for policymakers and for millions of Californians whose access to care depends directly on the numbers in their monthly bills.
