Some Southern Californians are poised to see their monthly health insurance premiums rise, or may even be at risk of dropping health insurance next year as Congress weighs an enhanced subsidy that’s set to expire in days.
Covered California is the state’s health insurance marketplace where many get financial help toward their monthly health insurance premiums. Over 800,000 people are subsidized in a swath of Southern California alone, according to a figure from June provided in an email from Covered California to the USA TODAY Network.
But officials have been alerting Californians for weeks to the major changes that could come next year if efforts to extend what’s known as enhanced federal tax credits fail by congressional lawmakers. It all comes as the deadline to enroll for health insurance through Covered California nears. Here’s what to know.
What’s going on with these health care subsidies? How does it impact me?
The COVID-era American Rescue Plan enhanced premium tax credits that had been extended both expanded eligibility and enhanced subsidy amounts for those accessing health insurance though health insurance marketplaces like Covered California, according to the Congressional Research Service.
But barring any action from lawmakers, it’ll expire at the end of the year. Without an extension of the enhanced premium tax credits, monthly premiums “are projected to rise by 97% on average for more than 1.7 million Californians enrolled and receiving financial assistance through Covered California,” the state’s health insurance marketplace said in October.
Californians receive nearly $2.5 billion in enhanced premium tax credits, according to Covered California.
Among the changes is that those with incomes over 400% of the federal poverty level (that’s $62,600 for a person or $128,600 for a family of four) will no longer receive the enhanced premium tax credit, according to the Congressional Research Service and the Center on Budget and Policy Priorities.
According to Covered California:
Inland Empire residents are projected to see costs increase 86%, an average of $111 more per month, as a result of the expiring enhanced premium tax credits.
In a swath of Southern California including Los Angeles, the Inland Empire and Orange County, nearly 88% of those enrolled received financial assistance as of June. Of this, approximately 97,350 people who earned an income of $400,000 of the federal poverty level or above received financial assistance through the enhanced premium tax credits only, Covered California said.
Covered California said that some people, when faced with the full costs of coverage without financial help, will be at risk of dropping their health insurance.
When does Covered California open enrollment end?
Open enrollment runs through Jan. 31, 2026. But those who want to have coverage for all of 2026 will need to select a health plan by Dec. 31, according to Covered California.
How much is the penalty for no insurance?
You may have to pay a penalty if you don’t have qualifying health insurance coverage. You can use the California Franchise Tax Board’s online estimator to determine how much you may owe.
Can I cancel Covered California anytime?
If you do get a plan, Covered California said it requires at least 14 days in advance to process the request. Their recommendation is to have your plan end at the end of the month.
Paris Barraza is a reporter covering Los Angeles and Southern California for the USA TODAY Network. Reach her at pbarraza@usatodayco.com.
This article originally appeared on USA TODAY: Why Covered California monthly premiums could rise by 97% next year
