Californians have until January 31 to purchase health insurance during Covered California’s open enrollment period. In 2025, nearly two million Californians were insured through Covered California, and most enrollees received federal tax credits that lowered their monthly premiums. However, the expiration of enhanced federal subsidies, along with rising costs, means many Californians will pay more for health coverage.

During the pandemic, Congress temporarily increased subsidy amounts and expanded eligibility to middle-income households—those earning between 400% and 600% of the federal poverty level (about $62,000 to $94,000 for an individual or $128,000 to $193,000 for a family of four). These enhanced subsidies, in the form of additional tax credits, were extended through 2025 via the Inflation Reduction Act. The recent federal shutdown was driven by the expiration of these enhanced subsidies, and while there has been recent action at the federal level to extend them, the path forward seems challenging—at least for this year.

Premiums for health plans sold through Covered California are set to rise by more than 10%, on average. Premiums vary considerably across California regions due to differences in health care markets; costs are much lower in large Southern California counties like Los Angeles, San Diego, and Riverside compared to other areas, especially rural counties in the state’s northern region and parts of the Central Coast. This year’s increases also vary across the state, from about 7.4% in the Sacramento region to nearly 13% in the Fresno area.

Although the statewide increase is the largest jump in Covered California premiums in recent years, it is much lower than the nationwide increase of 26% for 2026.

About 90% of Covered California enrollees receive federal subsidies that increase as premiums rise, providing some buffer against higher costs. However, without the extension of enhanced tax credits, many Californians will pay more this year. Middle-income families face the largest absolute increases (although not necessarily as a percentage of their incomes). Roughly 160,000 Californians who purchased insurance through Covered California in 2025 have lost eligibility for federal subsidies. Families in this group could see annual increases of more than $6,000 per person on average—ranging from about $4,000 in Southern California to more than $11,000 in higher-cost parts of the state. These differences reflect variation across counties in premium costs as well as the age, plan choices, and incomes of Covered California enrollees.

About 1.5 million Covered California lower-income enrollees earning below 400% of the federal poverty level should continue to receive ACA subsidies averaging $9,700. But without the enhanced subsidies, they will see an average increase of about $975 per year, ranging from $500 to $1,200 across counties.

California does have some revenue from a state-level “individual mandate,” which requires most Californians to have health insurance or pay a tax penalty. Instituted in 2019, the mandate was conceived as a way to both encourage people to purchase health coverage and generate revenue that could help families pay for health insurance, much like the enhanced federal subsidies.

The state stopped using this revenue to subsidize premiums during the pandemic because of increased federal support. Also, the amount raised annually falls well short of that now-expired support: in tax year 2024, revenue from the individual mandate totaled about $240 million—only about 10% of the estimated $2.5 billion in enhanced subsidies Californians received in 2025.

Federal policymakers are revisiting the issue of maintaining enhanced subsidies, it seems unlikely that anything will happen this year. As a result, many Californians—especially middle-income households—are now facing significantly higher costs.