California Health Insurance Premiums to Rise by 10.3% in 2026

California residents address concerns over rising health insurance premiums for 2026.

News Summary

California is projected to see a 10.3% increase in health insurance premiums for 2026, marking the first double-digit rise since 2018. This hike follows a previous 7.9% rise in 2025 and is primarily driven by escalating healthcare costs and the expiration of enhanced federal subsidies. Approximately 1.7 million enrollees may face significantly higher monthly premiums, with experts warning that up to 600,000 individuals could lose coverage due to affordability issues. The open enrollment period starts on November 1, urging officials to seek solutions for the financial strain on consumers.

California is set to experience an average health insurance premium increase of 10.3% for the year 2026. This rate hike marks the first double-digit increase since 2018 and follows a 7.9% rise in premiums for 2025. The projected increase is primarily attributed to escalating healthcare costs, the expiration of enhanced federal subsidies, and uncertainty surrounding the market.

Covered California, the state’s health insurance marketplace, has indicated that inflation and the impending expiration of federal financial assistance are significantly contributing to the rise in premiums. The expiration of enhanced premium tax credits, which were put in place during the COVID-19 pandemic, could potentially result in a further 66% increase in monthly premiums for approximately 1.7 million enrollees. This is especially concerning as Congress has not earmarked funding for these enhanced premium tax credits in its latest legislative proposals, leaving many consumers vulnerable to increased costs.

The State of California is at risk of losing around $2.1 billion in federal assistance aimed at helping consumers pay for coverage if enhanced tax credits are not renewed by Congress. In particular, this loss would affect around 90% of enrollees under the Affordable Care Act, placing additional financial strain on these individuals.

As a consequence, many enrollees will likely face higher premiums along with reduced assistance, resulting in significantly increased out-of-pocket costs. State officials have allocated $190 million to sustain subsidies for low-income residents earning up to 150% of the federal poverty level; however, this funding is deemed insufficient to cover the looming shortfall created by the subsidy expiration.

Experts estimate that as many as 600,000 individuals could lose their health coverage due to these rising costs and the withdrawal of subsidies. This scenario may exacerbate the situation by leaving a less healthy pool of enrollees, which could further increase future premiums. Factors such as tariffs on drugs, the costs associated with medical devices, and the prevalence of high-cost pharmaceuticals are contributing significantly to the overall rise in health insurance costs.

While California’s projected average premium increase stands at 10.3%, the national average has been projected to rise even more sharply at 20%. Covered California will continue to offer a competitive marketplace with 11 insurers providing plans statewide, despite the exit of Aetna, which will affect approximately 21,000 enrollees.

The open enrollment period for health insurance coverage generally begins on November 1, casting an urgent spotlight on the need for actionable solutions. Experts have expressed concerns that if younger and healthier individuals opt to drop their coverage, this trend may lead to increased premiums for those who remain insured. Covered California has emphasized the importance of having Congress extend the enhanced premium tax credits to shield consumers from further financial strain.

The final approval rates for the upcoming year are expected to be confirmed later this year, with the new premiums taking effect on January 1, 2026. The coming months will be critical for both enrollees and state officials as they navigate the complexities of health insurance affordability in California amid an evolving legislative landscape.