Health Insurance Premiums Set to Skyrocket in California
As open enrollment for health insurance begins on November 1, 2025, many Californians are facing alarming increases in their premiums. For Tara and Todd Nicklous, their monthly health insurance cost will rise from $923 to an unprecedented $3,264 under the Affordable Care Act (ACA). This shocking change has left them reeling as they prepare for the new year.
Tara Nicklous, a cancer patient who has been undergoing treatment for blood cancer for over a decade, expressed her dismay, stating, “My gut sunk.” The couple, who own a real estate appraisal business, initially qualified for these premiums due to expanded ACA tax credits introduced during the COVID-19 pandemic by former President Joe Biden in 2021. These credits are set to expire at the end of this year and are now a focal point in the ongoing federal government negotiations.
Impact on Californians
The impending expiration of these tax credits is projected to affect approximately 2 million residents using the Covered California marketplace for health insurance. According to figures released by Covered California, premiums are expected to double on average, with some enrollees seeing increases as high as threefold.
The situation has become a contentious issue in Congress. Democrats argue that the tax credits are crucial for maintaining affordable healthcare access, citing that these credits have helped to double national enrollment in the ACA. Conversely, Republicans have criticized the credits, claiming they disproportionately benefit undocumented immigrants who cannot access federally funded health insurance.
“When Covered California enrollees in the Bay Area notice the new pricing, their eyes are going to pop out of their heads,” warned Larry Levitt, a health policy executive at the KFF health policy group based in Oakland. Those particularly affected will include individuals in their 50s and 60s who are not yet eligible for Medicare.
For the Nicklouses, the decision to continue their coverage with Kaiser Permanente is now an unavoidable financial burden. Earlier this summer, Tara’s hospital billed Kaiser over $5 million for her T-cell therapy, underscoring the necessity of their insurance coverage. While they have managed to save for the upcoming premium, Tara acknowledges that they will need to make significant lifestyle changes to accommodate this hefty expense.
Future Uncertainty for Many
California officials estimate that about 400,000 residents may lose their eligibility for Covered California due to the changes. A report from the Urban Institute suggests that of this number, around 175,000 individuals could become entirely uninsured as a result of the premium hikes.
Representative Eric Swalwell, a Democrat from East Bay, criticized the Republican stance, stating, “For weeks, Democrats have been warning that leaving health care out of this funding bill would raise costs for millions of Americans. Now, those consequences are becoming reality.”
Should the federal tax credits expire as expected, state officials plan to implement limited assistance measures. California is preparing to allocate approximately $200 million in state tax credits to low-income individuals who earn slightly above the threshold for Medi-Cal, the state’s Medicaid program.
Covered California has begun notifying enrollees about the upcoming cost increases ahead of the open enrollment window, which runs until January 31, 2026. In addition to the expiring tax credits, health insurers are raising premiums by an average of 10% for 2026, driven by rising care costs and an increase in patients seeking expensive treatments.
Kaiser Permanente, California’s largest private insurer, announced a 7.1% increase for Covered California plans, though a spokesperson claimed it is lower than increases seen by many competitors. Another major insurer, Anthem Blue Cross, will implement a 14.5% rate hike, attributing this to the higher reliance on emergency services by ACA enrollees compared to those with employer-sponsored plans.
Healthcare professionals have expressed concern that rising costs and the potential loss of coverage will ultimately lead to poorer health outcomes. John Murphy, chief medical officer at La Clínica de La Raza, noted that when patients forgo preventative care due to cost, they increase their risk of requiring emergency services later.
The changes in healthcare policy are not just financial burdens but also reflect broader shifts in government spending priorities. As millions face the prospect of reduced coverage, the Nicklouses are preparing to tighten their belts significantly, with Tara stating, “We’re changing our shopping and our eating habits. I’ve never been such a Walmart and Costco shopper. Vacations? Forget it. Maybe camping.”
