Obamacare premiums may soar in 2026

Without federal subsidies, Covered California plans are too pricey for many.

- TYRONE BEASON

THE SENATE barbershop is closed because of the federal government shutdown.

Californians renewing their public health plans or who plan to sign up for the first time will be in for sticker shock when open enrollment begins on Saturday.

Monthly premiums for federally subsidized plans available on the Covered California exchange - often referred to as Obamacare - will soar by 97% on average for 2026.

The skyrocketing premiums come as a result of a conflict at the center of the current federal government shutdown, which began on Oct. 1: a budgetary impasse between the Republican majority and Democrats over whether to preserve enhanced, Biden-era tax credits that expanded healthcare eligibility to millions more Americans and kept monthly insurance costs affordable for existing policyholders. About 1.7 million of the 1.9 million Californians currently on a Covered California plan benefit from the tax credits.

Open enrollment for the coming year runs from Nov. 1 until Jan. 31. It's traditionally the period when members compare options and make changes to existing plans and when new members opt in.

Only this time, the government shutdown has stirred uncertainty about the fate of the subsidies, first introduced during the COVID-19 pandemic and which have been keeping policy costs low, but will expire at the end of the year if lawmakers in Washington don't act to extend them.

Californians window shopping on the exchange's consumer homepage will have to make some tough decisions, said Covered California Executive Director Jessica Altman. The loss of the tax credits to subsidize premiums only adds to what can already be a complicated, time-consuming and frustrating process.

Even if the subsidies remained intact, premiums for plans offered by Covered California were set to rise by roughly 10% for 2026, due to spikes in drug prices and other medical services, Altman said.