Covered California expects average health plan rate to increase 10.3% in 2026, experts are concerned more Californians will become uninsured

SAN FRANCISCO — Covered California's upcoming annual open enrollment will begin on November 1 and last until January 31 for the 2026 health insurance coverage. The California-State-sponsored agency announced that the average health plan rate was expected to increase 10.3% in 2026. Experts on health care services are concerned that more Californians will become uninsured because of the big raise and affordability.

Covered California has served as the state’s health insurance marketplace since 2013 and independently operated to assist Californians finding affordable health insurance coverage under the Patient Protection and Affordable Care Act. Enrollees of Covered California may qualify for financial assistance to reduce their premium costs based on their income.

This would be one of the largest health plan rate increases since Covered California was launched in October 2013. The highest proposed rate change in 2026 among 11 health plans selected by Covered California in its marketplace is Valley Health Plan at 21% and the lowest is Kaiser Permanente at 7.1%.

Covered California said the proposed rate change could be attributed to many factors, including the increasing cost of healthcare, pharmacy expenditures, broader industry challenges and federal health care policies.

Covered California urged the Congress to take timely action extending the federal enhanced premium tax credits that have played a vital role in lowering costs and driving enrollment increases nationally since 2021.

If the Congress fails to extend enhanced premium tax credits, Covered California said all 1.9 million enrollees in California could see an additional average net premium increase of 66 percent that would impact the majority of their enrollees.

“Skyrocketing health insurance premiums are the last thing Americans need right now,” said Covered California Executive Director Jessica Altman. “There is still time for Congress to act and protect the health care of millions of Americans who rely on marketplace coverage, and we’re hopeful that lawmakers on both sides of the aisle recognize the need to extend this essential lifeline for working families."

"Regardless of what happens, we’re here to help Californians access high-quality, affordable health insurance, and encourage everyone to contact us to find a plan that works for their needs and budget,” Altman said.

In 2025, Governor Gavin Newsom and the California Legislature increased the amount of state funds available for the enhanced cost-sharing reduction program, appropriating $165 million to expand eligibility, according to Covered California.

For 2026, California State has allocated $190 million to provide state subsidies for enrollees earning up to 150 percent of the federal poverty level, ensuring monthly premiums remain comparable to 2025 levels for those with an annual income of $23,475 for an individual or $48,225 for a family of four, Covered California said.

With Aetna’s exit from the marketplace in 2026, 11 health insurance companies will offer plans across the state for Covered California enrollees to have access to two or more choices in each region.

Latino has become the largest ethnic group of California's population at 40%, white is ranked second at 34%, Asian 16% , Black 6% and 3% are mixed races.

The latest enrollee profile data released in March 2025 shows that Asian Californians tend to rely on Covered California to find their health insurances. In 2025, 24.7% of 1.9 million enrollees of Covered California are Asians, 32% whites, 30.1% Latino, 2.7% Blacks, and 2.9% mixed races.

Enrollees of Covered California are mostly people of age 64 and under. Age 45 to 64 is the largest age group among all enrollees with 46.3%, age 30 to 44 is second with 26.2%, and age 19 to 29 represents 18%.

Dr. Joseph Woo, President of All American Medical Group (AAMG) and Board Member of San Francisco Health Plan, is concerned that the huge health plan rate rise would impact the Asian community significantly due to the employment nature of many Asian immigrants who are self-employed or work at small businesses like Chinese restaurants. Covered California is the only channel for them to receive financial assistance and subsidies for their health plans.

"A triple whammy is happening to our community workers who depend on Covered California. In addition to the huge rate increase, federal subsidies are set to expire, and there will be even more red tape to keep your insurance," said Woo. "As a result, so many members of our community will lose their coverage."

"At that point, people will skip routine care and end up very sick. Ultimately, this will overburden already struggling community hospitals like Chinese and Seton who will still need to provide care," Woo added.

Roy Yang, an accountant and health plan consultant in the San Francisco Bay Area, advised community members not to give up their health insurance although the plan rate has increased dramatically.

"No matter your age, if any emergency happens to an uninsured individual, the cost for hospitalization would be unlimited. If you have the health insurance coverage, the out-of-pocket limit on expenses could be up to $8,850 or a certain amount, depending on the coverage," said Yang, who suggested enrollees shop around for best health plans during the upcoming open enrollment period.

Yang also reminded community members that penalties would be imposed in the following year's tax returns if anyone was uninsured.

The uninsured penalty will be applied in the California State tax return and required by the California Franchise Tax Board. For not having health insurance coverage the entire year, the penalty is $900 per adult and $450 per dependent child under 18 in the household when the state income tax return is filed. A family of four that goes uninsured for the whole year would face a penalty of at least $2,700.

"Despite the rate increase, most Californians will still be able to shop for a different plan on the same metal tier without having to pay more for their health care," Covered California responded to the request for comment on the rate hike. "Renewal for Covered California’s nearly 2 million enrollees begins on Oct. 15 and Open Enrollment period begins on November 1, giving all Californians the opportunity to change plans that better meet their needs."

"Whether you’re renewing your current plan or shopping for a new one, we recommend that everyone get or maintain health insurance coverage to protect against the unexpected and care for your physical, mental, and financial health." Covered California said. "We encourage all Californians to visit our Shop and Compare tool at CoveredCA.com to shop different plans and find the right one that meets their financial and health care needs."