California Residents Face Steep Health Insurance Premium Hikes as Subsidies Expire
California residents are bracing for notable increases in health insurance premiums, with some families perhaps facing annual costs exceeding $4,000, as federal subsidies designed to lower healthcare expenses expire. Covered California is urging current subscribers to reassess their plans before the January 31st deadline to mitigate the financial impact.
As of January 1st, the end of expanded Affordable Care Act (ACA) subsidies is triggering a surge in premiums across the state.More than 1.7 million Californians could be affected by the rising costs,according to Covered California,the state’s health insurance exchange. The exchange announced on January 21st that individuals shoudl verify if their current insurance plan remains the most cost-effective option.
The financial strain is already being felt by many. Jorge Destrade, a 58-year-old film crew member in Echo Park, recently learned his family’s annual premiums will increase by approximately $4,200. “We are in a situation where we need to start saving for retirement, but the sudden increase in insurance premiums is a huge burden,” Destrade said, adding that finding affordable options is becoming increasingly arduous.
Destrade’s experience reflects a broader trend impacting roughly 2 million Californians who enrolled in ACA plans last year. These individuals benefited from pandemic-era subsidies that temporarily lowered their premium burden. With those subsidies now discontinued, premiums are soaring.
according to the Public policy Institute of California (PPIC),individuals earning $62,000 or less in Los Angeles,Orange,Riverside,and San Bernardino counties can expect to pay around $1,100 more per year. Families of four with incomes under $128,000 in the same region could see annual increases ranging from $3,630 to $4,300.
While Southern California is experiencing a substantial increase, other parts of the state face even higher costs. PPIC forecasts average family premiums reaching $11,000 annually in some Northern and Central California counties, with San Benito County potentially seeing premiums as high as $13,700. A recent survey by the Kaiser Family Foundation (KFF) projects an average premium increase of 114% nationwide by 2026.
The escalating costs are prompting some to drop coverage altogether.Data from Covered California, as reported by the Bay Area News Group, reveals a 31% decrease in total subscribers compared to the previous year. This trend is mirrored nationally, with the Medicare and Medicaid Services (CMS) reporting a decline of approximately 1.4 million enrollees due to the end of the additional ACA subsidies. As of January 3rd, ACA enrollment stood at 22.8 million, down from 24.2 million during last year’s full enrollment period – a decrease of roughly 800,000 from the same time last year.
Healthcare policy experts anticipate further subscriber declines in the coming months as automatically re
Why: Federal subsidies that lowered healthcare costs during the pandemic expired on January 1st, 2024.
Who: Over 1.7 million Californians, particularly those earning under $62,000 individually or $128,000 as a family of four, are affected. Jorge Destrade, a film crew member, is an example of an individual experiencing these increases.
What: Health insurance premiums are significantly increasing across California, with some families facing annual costs exceeding $4,000 and potentially reaching $13,700 in certain counties. Enrollment in ACA plans is declining.
How: The expiration of the ACA subsidies
