Patients across the state are opting for health insurance plans with higher deductibles to reduce their monthly cost as federal subsidies appear to be coming to an end.
Residents only have a few days left to make a major decision about their health coverage as the deadline to have coverage for all of 2026 is Dec. 31.
Lawmakers have been debating over the future of the Affordable Care Act and whether to extend the subsidies that have helped customers pay for their health insurance premiums since 2021. With the House and Senate adjourned until the New Year, it seems like those tax credits are coming to an end, leaving customers to prepare for higher costs.
Covered California Executive Director Jessica Altman said they are already seeing the impacts from Congress not renewing enhanced premium tax credits, as only 123,461 Californians have signed up for 2026 coverage as of Dec. 20, a 30% decrease from the same time last year.
“People are choosing and moving into plans that have a lower monthly cost, which makes sense because that’s where the premium tax credits are impacting, but then they come with higher deductibles and out-of-pocket costs,” Altman said. “How I would describe how I view that is people feeling like in order to afford coverage, they have to move into a plan with that type of structure, a higher deductible.”
Santa Barbara County could see significant impacts from the end of these tax credits as 20,220 of the 22,160 people in the county enrolled through Covered California receive help paying for their premiums, according to Altman.
Since the enhanced assistance was enacted in 2021, health insurance enrollment in Santa Barbara County increased by 28%.
Right now Altman said California residents pay on average $150 a month, which is expected to double to $300 a month as tax credits come to an end. However, how much someone pays depends on their yearly income.
“If the enhanced tax credits expire, first of all, we’re very concerned that we could see some people say, ‘I just can’t afford it anymore’ and go without coverage,” Altman said. “That is a scary thing for people and for their own health and financial security and peace of mind.”
This could also lead to significant impacts on the health care system as patients may forgo preventative care, leading to higher cost health conditions in the future that could have been prevented, Altman said.
As a result, providers could be seeing less patients as they lose their coverage, and Altman said hospitals could be forced to reduce their number of physicians or cut services that don’t bring in enough profit.
“It’ll be years before we really see the provider impact of these collective changes coming out of DC, but they can really reshape and stress our health care system, and particularly the safety net of our health care system, in ways that should worry all of us and don’t just impact people who have Medi-Cal or Covered California,” Altman said. “These are providers that serve entire communities no matter where you get your health care.”
To have insurance in January, customers need to enroll by Dec. 31, but the open enrollment period for the rest of 2026 ends Jan. 31.
To compare monthly premium estimates on a variety of plan options from top insurers, consumers can use the shop and compare tool at CoveredCA.com.
Customers can also call Covered California at (800) 300-1506 to get free assistance when choosing their plan.
