California’s health insurance market is bracing for chaos as the shutdown continues

California this week plans to notify enrollees in the Affordable Care Act’s marketplace that their costs could rise sharply next year unless Congress extends subsidies to help people buy health insurance.

The country’s health care analysts say The uninsured population will rise Significantly if federal lawmakers do not agree to renew COVID-era tax credits, which Congress authorized in 2021 to supplement support for the ACA.

They’re famous too. According to A KFF pollMore than three-quarters of adults, including 59% of Republicans, say they want Congress to extend enhanced tax breaks for people with low and moderate incomes. KFF is a non-profit health information organization that includes KFF Health News, publisher of California Healthline.

The additional appropriations have lowered insurance premiums, helped millions of Americans afford ACA insurance, and lowered the value of insurance. Uninsured rate in the country.

Last week, President Donald Trump Proposed health care deal It may be in the works. Republican U.S. Rep. Marjorie Taylor Greene of Georgia, long allied with the Make America Great Again movement, appeared to support extending the tax breaks, saying in Posted on social media She is “so disgusted that health insurance premiums will double if the tax credits end this year.”

However, Republican leaders want it Government reopening First, while Democrats want to reach an agreement in a bill that ends the shutdown.

If supplemental subsidies are not extended beyond this year, the amount subsidized consumers pay for their ACA health plans is expected to rise. More than double On average. That would be a painful cost-of-living increase for most of the nation’s more than 24 million marketplace enrollees, including nearly 90% of the nearly 2 million people in Covered California, The largest state-run health insurance market. Analysts say losing the enhanced credits would prompt millions to drop their coverage nationwide, including hundreds of thousands in California.

The federal government shutdown stems primarily from disagreement between Democratic lawmakers, who want to extend the tax breaks, and Republicans opposed to the cost and, in many cases, the landmark health care law itself. One estimate puts At a price of 350 billion dollars More than 10 years. Democrats hope their position will help them reclaim the House of Representatives in next year’s midterm elections, as they did in 2018 after the failure of GOP efforts to repeal the Affordable Care Act.

The 2026 open enrollment season for ACA health plans begins Nov. 1 in most states, including California, and enrollees still have no idea whether their premiums will rise significantly next year.

“People need to be able to shop for health plans,” says Jessica Altman, CEO of Covered California. “We are at a pivotal moment.”

In July, Covered California sent notices to enrollees to cancel the enhanced portion of federal support that was set to expire. The idea was to give them a warning about how much their costs would rise if they chose to keep the same health plan next year.

In one case, a common scenario for middle-income enrollees is: Full support worth $200 A month will disappear. Another recorder stood for Loss of a third For a total of $600 per month in assistance, according to sample notices provided by Covered California.

Additional tax credits provided financial assistance to many middle-income health plan shoppers who did not qualify for the original subsidies and increased the amount of aid for many others.

Senate Majority Leader John Thune in late September Leave the door open He called for an extension of the tax breaks that were due to expire, but said, “This must come with some reforms.”

These changes may include changes that would reduce the number of enrollees eligible for additional financial aid, based on income, and reduce or eliminate zero-premium plans, which have become more widely available with the advent of additional tax credits.

If the enhanced subsidy ends, Covered California expects that its enrollees who receive the enhanced subsidy will see their premium costs rise by an average of 97%. But the increases will not be borne equally. Depending on age, income and location, some people will see smaller jumps while others may see their direct costs triple, Altman says.

Rural populationNorthern and eastern counties, and along the Monterey Coast, will see disproportionately large cost increases, according to Covered California projections. Enrollees with incomes over $62,600 will lose financial aid entirely, leaving some between the ages of 55 and 64 with premium bills of up to 30% of their income.

Without the enhanced benefits, “we’re going to see more people with medical debt, and more people either uninsured or underinsured,” says Carrie Sanders, senior policy director at the nonprofit California Public Health Network. “And that’s the quickest path for families to lose their economic security.”

Covered California estimates that about 400,000 people will leave the exchange and likely go uninsured. Health care professionals and advocates warn that this will only increase pressure — in the form of more crowded emergency rooms and community clinics — on an already strained health care system.

But the relative impact in California will be smaller than in some Republican-led states such as Florida, Texas and Georgia. Since those states did not embrace the ACA’s Medicaid expansion, millions of residents flocked to Obamacare marketplace plans, especially after enhanced tax credits made coverage significantly more affordable.

From 2020 to 2025, Register on the ACA Marketplace It grew nearly 2.5 times in Florida to 4.7 million — more than double California’s market enrollment. In Texas, the number has more than tripled to just under 4 million. Georgia’s population also tripled to 1.5 million.

California has about $190 million for 2026 in state funds to help offset the loss of enhanced premium subsidies. But these funds are currently being used to help offset enrollee deductibles, coinsurance payments, and other out-of-pocket expenses. It is a drop in the bucket compared to $2.5 billion annually In the financial aid covered California enrollees currently receive from expiring tax credits.

“A lot of people are going to be shocked by what they’re facing,” says Rachel Lynn Gish, spokeswoman for the nonprofit group Health Access California. “They’re going to have to make very difficult choices: Am I going to cut back on my groceries, my rent, or am I going to remain uninsured?”

Very soon, Covered California and other ACA markets will have to send out formal open enrollment letters, notifying enrollees precisely what to expect for 2026 coverage.

Covered California normally sends these letters on October 1, but has pushed them back to around October 15 in hopes that Washington will provide clarity. Right now, Covered California has two versions of the letter on ice, one with the tax credit extensions and one without.

Altman says she hopes for action from Congress before sending out a resolution that includes massive premium increases. But she may not have a choice.

“That’s the default here, as in the thing that will happen if nothing changes,” Altman says. “It’s also the worst-case scenario unfortunately.”

She fears that if Covered California tells enrollees that their rates are likely to rise sharply, it will scare off many, even if Congress later agrees to extend the credits.