Affordable Care Act subsidies are set to expire at midnight, raising concerns over a potential dramatic increase in health insurance premiums. According to analysis from KFF, the expiration of these tax credits, which played a crucial role during the recent federal government shutdown, could lead to an average premium increase of 114%. This spike is expected to disproportionately affect those nearing retirement and individuals with higher incomes.
This development emerges amid ongoing discussions about another possible government shutdown, as the temporary funding established after the last shutdown is set to only last through January.
In California, the implications for Covered California—a health insurance marketplace created under the Affordable Care Act—are particularly pronounced. Covered California serves over 1.9 million residents who do not receive health coverage through their employer and offers premium discounts for many enrollees.
The deadline for open enrollment to obtain health insurance coverage by January 1 is December 31. However, individuals can still sign up for coverage for 2026 before the open enrollment period ends on January 31. To mitigate the effects of the lost Affordable Care Act credits, California has earmarked $190 million for 2026. Recently, the state reported that over 364,000 individuals had already enrolled with state subsidies.
The assistance aims to maintain monthly premiums at 2025 levels for those earning up to $23,475 for individuals and $48,225 for a family of four. A reported 92% of Covered California’s enrollees receive some form of financial assistance, with almost half qualifying for plans costing $10 or less. Furthermore, nearly a quarter of enrollees could obtain a Silver plan for the same premium in 2026, while 17% of renewing customers might not face any premium costs if they remain with their current plans.
Despite these efforts, Covered California’s Executive Director, Jessica Altman, cautioned that rising costs could lead to up to 400,000 individuals becoming uninsured. As the state navigates these changes, residents can access more information about their options at CoveredCA.com.
