California, September 27, 2025

News Summary

California is on the brink of a health insurance crisis due to the impending expiration of federal subsidies vital for maintaining affordable coverage. As Congress debates funding, insurance costs could double, risking health coverage for hundreds of thousands. If subsidies are not extended, approximately 400,000 individuals may exit the insurance marketplace, significantly impacting the state’s efforts to provide accessible health care. With California setting aside $190 million to assist, experts warn that greater intervention is needed to prevent economic hardships for families relying on healthcare support.

California Faces Potential Health Insurance Crisis as Subsidy Expiration Looms

California regulators have issued a warning that a potential government shutdown could critically impact the state’s health insurance market. The current conflict in Washington revolves around the soon-to-expire insurance subsidies, with Democrats advocating for an extension while Republicans prefer a “clean” stopgap funding bill. If Obamacare subsidies expire, insurance costs in California might double, jeopardizing health coverage for hundreds of thousands of residents.

Martha Santana-Chin, CEO of L.A. Care, notes that many individuals may be unable to afford insurance if prices soar. This situation poses a significant challenge for California, which has worked over the past decade to expand access to health coverage. Congress must take action by year-end to reauthorize funding, as decisions made in the upcoming week will directly affect consumer pricing for policies during October’s open enrollment period.

Jessica Altman, executive director of Covered California, is preparing for two scenarios concerning open enrollment: one where subsidies are extended and another where they are not. In the event subsidies are not extended, Altman predicts a 100% rise in monthly premiums could lead to approximately 400,000 individuals dropping out of the health insurance marketplace. This could mean almost 25% of total enrollees in California might be without coverage.

California has set aside $190 million to help bridge health insurance funding gaps aimed at supporting low-income consumers in case the tax credits expire. However, this fund is substantially less than the estimated $2.5 billion loss the state would face if the credits were to vanish. Nearly 90% of Covered California enrollees rely on some form of financial assistance, and the withdrawal of this support typically results in higher dropout rates, especially among younger, healthier individuals.

Insurance marketplaces face additional challenges due to anticipated changes from a Republican megabill that may lead to increased administrative burdens and eligibility complications for immigrants. Ongoing negotiations regarding subsidy extensions in Washington show that Republicans prefer to discuss these concerns closer to year-end, rather than during government shutdown negotiations.

Democratic lawmakers are leveraging the urgency of healthcare funding negotiations within the context of broader government funding discussions, focusing on regions with high concentrations of Covered California enrollees. Covered California has begun notifying consumers of the possible changes and uncertainties in health coverage costs they may encounter.

Average premiums in California are estimated to rise by 10% this year, marking the first double-digit price increase in nearly a decade. This increase is attributed to heightened healthcare costs linked to uncertainty in the market. Further complications are anticipated as enhanced premium tax credits are set to expire at the end of 2025, potentially resulting in a 66% rise in average net premiums for 1.7 million enrollees in 2026.

California’s projected average premium increase of 10.3% for 2026 remains below the national average of 20%, suggesting variations in premium increases across different states. Key factors driving up premiums include inflation, rising labor and healthcare costs, and increasing demand for prescription medications.

Experts caution that the expiration of subsidies could lead to substantial economic and health risks for individuals losing insurance coverage. There is an urgent need for Congressional intervention to extend subsidies, aimed at alleviating financial pressures for American families.

FAQ

Deeper Dive: News & Info About This Topic

• Politico: California Braces for a Health Insurance Meltdown
• Wikipedia
• Newsweek: Californians Warned of Devastating New Health Insurance Costs
• Google Search: health insurance California
• SF Chronicle: Covered California Premium Increase
• Google Scholar: health insurance, California
• Forbes: Best Health Insurance for Young Adults
• Encyclopedia Britannica: health insurance

Author: STAFF HERE CORONADO

The Coronado Staff Writer represents the experienced team at HERECoronado.com, your go-to source for actionable local news and information in Coronado, San Diego County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the Coronado Island Film Festival, productions at Lamb’s Players Theatre, community workshops at John D. Spreckels Center, and iconic celebrations at Hotel del Coronado. Our coverage extends to key organizations like the Coronado Chamber of Commerce and Visit Coronado, plus leading businesses in hospitality, dining, and tourism that drive the local economy. As part of the broader HERE network, including HERESanDiego.com, HEREHuntingtonBeach.com, HERELongBeach.com, and HERELosAngeles.com, we provide comprehensive, credible insights into Southern California's dynamic landscape.