Covered California 2026: What You Need to Know About Upcoming Rate Increases

If you’re currently enrolled in a Covered California plan, you’ve likely heard the buzz—and the worry—about what’s coming in 2026. Between rising premiums and the expiration of certain federal subsidies, many Californians are asking the same question: What’s really going on with my health insurance next year?

At Medical Insurance Today, our goal is to help you cut through the noise. Every day our team speaks with clients who are rightfully concerned about healthcare affordability, so let’s take a clear, factual look at what’s happening—and what you can do to prepare.

Top 3 Takeaways for Covered California Members Heading Into 2026

1. Covered California premiums are expected to rise by over 10% in 2026 — the largest statewide increase in years.
Healthcare inflation, medical claim costs, and policy uncertainty are driving record-high premium hikes across California’s health insurance marketplace.

2. Federal subsidy expansions for higher-income households are ending after 2025.
Those earning above 400% of the Federal Poverty Level (FPL) will lose access to enhanced subsidies introduced by the Inflation Reduction Act, resulting in higher out-of-pocket premiums in 2026.

3. Working with a licensed agent can help offset rising costs and protect your coverage.
Expert agents at Medical Insurance Today can review your plan options, calculate potential savings, and help you find affordable alternatives — at no cost to you.

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The Perfect Storm Ahead

Covered California is the state’s health insurance marketplace, where individuals and families can purchase coverage and, in many cases, qualify for income-based subsidies to lower their monthly premiums.

Since 2014, the Affordable Care Act (ACA) has provided discounts to households earning below 400% of the federal poverty level (FPL). The lower your income, the greater the subsidy you receive.

In 2022, the Inflation Reduction Act (IRA) temporarily expanded these subsidies, allowing even those above the 400% threshold to receive premium assistance. That policy provided significant relief for middle-income families—but it’s scheduled to expire at the end of 2025.

Here’s what that means:

• If your income is below 400% FPL, your subsidies will remain intact.
• If your income is above 400% FPL, you will likely lose eligibility for those temporary subsidies and pay the full cost of your insurance.

So, despite headlines suggesting subsidies are “disappearing,” that’s not the full story. They’re simply reverting to pre-2022 rules—and the shift will disproportionately affect those just above that income threshold.

The Other Half of the Equation: Rate Increases

Losing subsidy support is just one side of the equation. The other is the historic premium hikes expected in 2026.

Covered California has already projected an average rate increase of just over 10% statewide—the largest since the exchange launched. Historically, rate changes hover around 5%, so this is roughly double the usual bump.

Nationwide, experts predict even steeper jumps. Some states are bracing for 15–20% average increases, driven by inflation, rising medical costs, and continued uncertainty in the healthcare market.

Insurance companies—often painted as the villains in these conversations—are facing mounting claims costs, limited profit margins under ACA regulations, and greater financial risk overall. While that doesn’t make the premium increases any easier to swallow, it does shed light on why they’re happening.

What It Means for You

If your household income is above 400% FPL, you could see significant premium increases in 2026. Many Californians in this category will have to reassess their coverage level—possibly shifting from Gold or Silver plans down to Bronze just to stay insured.

Unfortunately, some may consider dropping coverage altogether, but that’s a dangerous move. Health insurance still protects you from catastrophic medical costs and shields your assets in the event of a serious illness or accident. Going uninsured could expose you to tax penalties and financial ruin if you face unexpected medical bills.

Now more than ever, it’s critical to review your plan, understand your options, and make smart adjustments before open enrollment begins.

How Medical Insurance Today Can Help

At Medical Insurance Today, our mission is simple: to help Californians stay insured, informed, and protected—without charging a single dollar for our services.

Our licensed agents work with all major carriers across the state, offering personalized guidance to help you:

• Compare plans and carriers side-by-side
• Understand how your income affects your premiums
• Explore subsidy options and eligibility
• Adjust coverage to fit your changing budget
• Keep the doctors and hospitals you trust

Open Enrollment for 2026 coverage begins November 1, but current Covered California members can renew starting October 15. We expect this year to be exceptionally busy—so reach out early to get the support you need.

Yes, healthcare costs are climbing, and 2026 will bring new challenges. But the system isn’t collapsing, and you don’t have to navigate it alone. With the right information and expert guidance, you can make smart, confident decisions for yourself and your family.

If you’d like one-on-one help reviewing your options for 2026, our team is ready.

👉 Contact us today to schedule your free consultation.

Together, we’ll make sure you stay protected—no matter what the market does next.