How much will your health insurance premiums increase on Covered CA if the tax credits expire at the end of 2025? What can you do now?

Blue background image that reads Covered California Tax credits could expire in 2026 — Let's plan for 2026

You must have heard in the news how millions of Americans will be losing coverage under Medicaid (Medi-Cal in California) and SNAP Benefits.

However, what is also under review, is the elimination of the Extended Premium Tax credits (ePTC) on the ACA marketplace (Covered CA) which could significantly increase your insurance premiums in 2026. In addition, there could also be other changes which include, shorter open enrollment periods, elimination of automatic enrollment and income documentation. (No more Attestation documentation)

What Are Enhanced Premium Tax Credits (ePTCs)?

Simply put, ePTCs are federal subsidies that reduce the monthly premiums you pay for health insurance plans purchased through Covered California. Before these enhancements, tax credits were available to individuals and families within a specific income range, and there was a "subsidy cliff" where those earning just over 400% of the federal poverty level (FPL) lost all financial assistance.

Expanded Affordability from the Enhanced Premium Tax Credit ePTC info graphic highlights benefits, consumer savings, and 2025 expiration warning. — What is ePTC?

Currently:
- Nearly 1.75 million Californians are enrolled in subsidized coverage
  receiving enhanced premium tax credits.
- With the enhanced premium tax credits, Covered California consumers save an average of $537 on their monthly premiums.
- In total, Californians are estimated to receive as much as $11 billion in savings for their monthly premiums, with around $2 billion from the enhanced premium tax credits.
If enhanced premium tax credits expire at the end of 2025:
- Premiums could increase by $101 per month (a 66% increase)
- More than 173,000 consumers could lose eligibility for premium tax credits entirely.

Bar chart showing premium increases if tax credits expire for incomes under 400% of the federal poverty level. Gray bars indicate higher costs than teal bars. — Expected Increase if your current income projection is less than $60,240

Graph showing increased premiums without tax credits for incomes over 400% FPL. Bars contrast current vs. potential costs. Text explains savings. — Expected increase if your current income projection is more than $60,240

What Can You Do Now?

While the decision is currently being discussed in Congress, there are proactive steps you can take to prepare and protect yourself:

Review Your Current Coverage: Understand your current plan, including your monthly premium and any subsidies you receive.
Estimate Your Future Costs: While exact figures for 2026 aren't yet available, be prepared for the possibility of significant increases. Start thinking about how higher premiums might impact your household budget.
Stay Informed: Keep an eye on news and updates regarding the potential extension of these tax credits. Your voice, and the collective voice of Californians, can make a difference in advocating for continued affordability.
Connect with me, Edsel Dsouza, ECD Insurance Agency: This is where I come in. As your insurance agent, I am here to help you navigate these potential changes. I can:
- Explain how the expiration of the enhanced tax credits might specifically affect your plan and financial situation.
- Help you explore alternative coverage options that might become more affordable if subsidies change.
- Answer any questions you have about your current policy and future possibilities.
- Guide you through the re-enrollment process when the time comes, ensuring you make informed decisions.