Covered California Projects 10.3% Rate Increase for 2026

News Summary

Covered California has announced a proposed average rate increase of 10.3% for health plans in 2026. This increase could strain many families financially, particularly if Congress does not extend enhanced premium tax credits set to expire in 2025. Approximately 1.7 million enrollees may see their premiums rise significantly. Despite this, Covered California is negotiating with insurers to secure better rates and has introduced state-funded assistance for low-income residents. The state aims to maintain affordability and improve access to health insurance.

California – Covered California has announced a projected average rate increase of 10.3% for health plans in 2026. This proposed increase comes as the organization calls on Congress to extend federal enhanced premium tax credits, which have played a crucial role in reducing costs and increasing enrollment in health insurance plans over the past four years.

The significant rate hike could be lessened if Congress votes to prolong the premium tax credits beyond their expected expiration at the end of 2025. Without such action, around 1.7 million enrollees in California may experience an eye-watering average net premium increase of 66%, placing an immense financial burden on many families.

As health care costs continue to rise, Covered California’s executive director has highlighted the pressing need for legislative action on these tax credits. The organization aims to alleviate unease concerning the increasing premiums, which are viewed as particularly detrimental to Americans navigating economic challenges.

Despite these looming increases, Covered California reported record-high enrollment figures, indicating a growing reliance on its health insurance marketplace. The state is also in negotiations with insurers to secure better values for its health plan participants. Approximately 11 health insurance companies are preparing to offer plans across California in the upcoming year, while Aetna will be exiting the marketplace, impacting about 21,000 enrollees who will need to select alternative plans.

To address affordability concerns, California has implemented state-funded assistance programs. The state legislature and Governor Gavin Newsom have allocated $190 million for the 2026 fiscal year, specifically targeting support for low-income residents earning up to 150% of the federal poverty level. This funding aims to stabilize premiums for vulnerable enrollees, enabling more consistent access to necessary health services.

Covered California’s proactive approach to maintaining affordability is further evidenced by California’s average rate increase being notably lower than the national average, which sits at 20%. Additionally, by 2025, nearly 2 million Californians are expected to be covered, reflecting the state’s ongoing commitment to enhancing health insurance accessibility and affordability.

The proposed rate changes for 2026 primarily stem from the rising costs associated with healthcare services and projections regarding the expiration of federal tax credits. These conditions necessitate ongoing efforts to keep insurance premiums manageable and ensure sufficient coverage in a time of heightened economic uncertainty.

As Covered California prepares for 2026, its focus remains on meeting the goals laid out in the Affordable Care Act while safeguarding the interests of its residents. By continuing to advocate for the extension of premium tax credits, the organization hopes to mitigate the impact of the proposed rate increases and ensure that millions of Californians have access to affordable health insurance.

Deeper Dive: News & Info About This Topic

• Sacramento Bee: Local News on Health Care
• Wikipedia: Health Insurance in the United States
• ABC10: California Ballot Measure on Health Care
• Google Search: Health Care California
• PR Newswire: Health Partnership in Sacramento
• Encyclopedia Britannica: Health Care
• Sac Observer: Medicaid Cuts and Women’s Health
• Google News: Medicaid California