Congressional Republicans’ Failure to Extend Tax Credits Forces 660,000 Californians to Choose Between Health Coverage and Financial Security
On Thursday morning, Covered California announced average monthly premium rates will increase by 10.3 percent in 2026, compared to the 7.9% average premium rate increase in 2025. More concerningly, federal enhanced premium tax credits which have helped to make health insurance more affordable, are set to expire at the end of the year. If Congress fails to extend the tax credits, hundreds of thousands of Californians will see their monthly premiums skyrocket and be forced to make an impossible choice: keep their health care coverage or pay for daily living necessities including rent, food, transportation, and utilities.
California has made historic progress in expanding health coverage since the passage of the Affordable Care Act (ACA) and launch of Covered California, which is threatened to be rolled back as California consumers face increasing health care cost burdens with rising monthly premiums and increasing share of cost. Currently, monthly premiums are capped at 8.5% of a household’s monthly income, made possible by the federal enhanced premium tax credits. However, Covered California shared that roughly 1.7 million enrollees could see their average monthly premium increase by 66% if Congress does not extend the tax credits.
This past June, Covered California estimated that approximately 660,000 of Covered California’s nearly 2 million enrollees, or 1 in 3 enrollees, will no longer be unable to afford the monthly premiums and be forced to drop their health care coverage.
These numbers represent real people. They are our neighbors, small business owners, caregivers, restaurant workers, and families across California. When people lose health care coverage or are underinsured, they delay care until preventable conditions become life-threatening emergencies, leading to higher healthcare costs in the long run. They are crushed by expensive medical debt that drives low and middle-income families into poverty. And we all pay the price through higher healthcare costs, overwhelmed emergency rooms, and sicker communities.
This was entirely preventable. In the midst of a nationwide affordability crisis, Republicans in Congress turned their backs on millions of hardworking Americans by choosing to pass President Trump’s tax cuts for the wealthy paid for by cutting trillions of dollars in funding for lifesaving Medicaid, Medicare, and state-based marketplaces.
The enhanced premium tax credits that kept marketplace coverage affordable are set to expire December 31, 2025. Congress still has time to act, but the window is closing fast.
Although insurance rates for 2026 are already set, Congress can protect Americans from facing the full burden of the higher rates and help keep monthly premiums affordable if it extends enhanced premium tax credits by September 30, 2025 (the end of the federal fiscal year). California has stepped up and allocated $190 million to provide a state subsidy for the lowest income consumers making up to 165 percent (about $53,000 for a family for four) of the Federal Poverty Level so that their monthly premiums do not change significantly from 2025 to 2026, but the State is unable to backfill the massive $2.1 billion shortfall that would be left by the expiration of the federal tax credits.
Access to healthcare shouldn’t be a luxury. It’s what keeps families out of poverty, allows people to work, and strengthens our economy. When we invest in affordable healthcare, we invest in California’s economic future. We call on our Congressional representatives to do their job to support everyday Californians, rather than padding the pockets of the wealthy.
