By Mobi Roller 
Sacramento, California
News Desk | Health Policy
Millions of Californians enrolled in health coverage through Covered California are expected to face higher premiums and out-of-pocket costs in 2026 after the expiration of enhanced federal subsidies under the Affordable Care Act, according to state officials and recent federal analyses.
The temporary subsidies, first expanded during the COVID-19 pandemic, lowered monthly premiums and broadened eligibility for middle-income households. Their scheduled end at the close of 2025 means many enrollees will see noticeable price increases when renewing plans for the next coverage year, state exchange leaders said.
Covered California Executive Director Jessica Altman said the loss of federal support will disproportionately affect moderate-income families who do not qualify for traditional assistance but relied on the enhanced aid to keep coverage affordable. She added that the state is reviewing options to blunt the impact but acknowledged that California alone cannot fully replace the federal funding.
Federal data cited by health policy groups show that without the enhanced subsidies, average premiums nationwide could rise by double-digit percentages for some consumers, leading to coverage losses. Analysts warn that healthier individuals may be more likely to drop coverage, potentially driving costs higher for those who remain insured.
Similar concerns have been raised in other states, with health insurers cautioning that reduced enrollment could destabilize individual insurance markets. Small businesses that purchase coverage for employees through ACA-related plans may also face higher renewal rates, according to industry groups.
State lawmakers in Sacramento have previously used state funds to supplement federal assistance, but budget constraints and competing priorities complicate efforts to offset the latest cuts. Officials said enrollment outreach for the upcoming open season will focus on helping consumers compare plans and assess whether they qualify for remaining subsidies or Medi-Cal.
Consumer advocates urged Congress to reconsider the subsidy reductions, arguing that the changes could reverse coverage gains achieved over the past several years. Federal officials have said no further extensions are currently planned.