2026 Sees Rising Costs for Covered California Health Insurance: The Reason Behind the Double-Digit Hike

In California, individuals obtaining health insurance through the state's marketplace can anticipate an average premium increase of 10.3% next year. Covered California officials recently reported this is the first double-digit rate hike since 2018, attributing it to a blend of factors impacting the market. Rising healthcare costs, the termination of enhanced federal subsidies, and uncertainties in policy are driving this trend, noted Director Jessica Altman. Historically, insurers have budgeted for an annual 8% rise in healthcare expenses, which forms a significant portion of this increase. The expiration of federal financial aid, particularly the enhanced premium tax credits, further compounds the situation. Health insurance agent Ariana Brill warns consumers may face dual financial challenges—higher rates and reduced assistance. State officials are allocating $190 million to support those earning up to 150% of the federal poverty line, but this falls short of the $2.1 billion potential loss. Experts indicate this could exacerbate affordability issues, leading to greater reliance on less comprehensive plans.