As open enrollment for health insurance begins on November 1, 2025, many Californians are facing drastic increases in their health insurance premiums. For example, Tara and Todd Nicklous, who purchased their coverage through the Affordable Care Act (ACA), have seen their monthly premium soar from $923 to an alarming $3,264. Tara, 56, expressed her shock, stating, “My gut sunk.”
The couple, who operate a real estate appraisal business, had benefited from expanded ACA tax credits introduced during the COVID-19 pandemic in 2021. These credits are set to expire at the end of this year, and their fate has become entangled in ongoing federal government negotiations. Democrats are insisting on extending these credits to prevent financial hardship for millions, while Republicans are holding out for a resolution on government funding before discussions can proceed.
Health insurance costs are expected to significantly impact many residents in California, particularly those who depend on the ACA marketplace. Figures from Covered California indicate that, on average, premiums will double for the state’s 2 million enrollees. Some middle-income individuals may even see their premiums triple, a situation that has drawn criticism from state officials.
According to Rep. Eric Swalwell, a Democrat representing the East Bay region, the failure to include healthcare funding in the current budget negotiations has dire consequences: “For weeks, Democrats have been warning that leaving health care out of this funding bill would raise costs for millions of Americans. Now, those consequences are becoming reality.”
The Nicklouses purchase their health insurance from Kaiser Permanente through the Covered California marketplace. Tara has been undergoing treatment for blood cancer for over a decade, and she noted that her hospital billed Kaiser more than $5 million for a specific therapy this summer. The couple is determined to manage the new premium costs, but they anticipate making significant lifestyle adjustments as a result. “We’re hunkering down,” Tara stated.
Impact of Expiring Tax Credits
The impending expiration of ACA tax credits is expected to leave approximately 400,000 Californians without coverage. A report from the Urban Institute estimates that around 175,000 individuals may be priced out of health insurance altogether. The figures underscore the urgency of the situation as more residents confront the reality of skyrocketing costs.
Larry Levitt, a policy executive at KFF, emphasized the drastic changes enrollees will face, particularly those in their 50s and 60s who have not yet qualified for Medicare. “When they see the new pricing, their eyes are going to pop out of their heads,” he remarked.
In response to the anticipated crisis, California officials have planned limited assistance for low-income residents earning slightly above the threshold for Medi-Cal, the state’s Medicaid program. The state is set to provide about $200 million in tax credits to help these individuals.
Rising Costs and Healthcare Access
In addition to the expiring tax credits, health insurers in California are adjusting 2026 premiums upward by an average of 10%. This increase is influenced by the rising costs of care, as more patients begin to rely on expensive medications, including weight-loss drugs like Ozempic.
Kaiser Permanente is raising its rates by 7.1% for Covered California plans, claiming this increase is lower than those of most competitors but providing no further details. Additionally, Anthem Blue Cross is implementing a 14.5% increase, which reflects a growing reliance on emergency rooms for care among ACA enrollees compared to those with employer-sponsored plans.
John Murphy, chief medical officer at La Clínica de La Raza, which serves a large patient base in the Bay Area, highlighted the potential long-term effects of these changes: “Rising coverage costs and loss of insurance make patients less healthy. Patients put off preventative care when it’s too expensive, and eventually, they’ll land in a hospital emergency room.”
As the Nicklouses brace for a challenging year ahead, they are adjusting their spending habits. Tara mentioned, “We’re changing our shopping and our eating habits. I’ve never been such a Walmart and Costco shopper. Vacations? Forget it. Maybe camping.” The couple hopes for a resolution that might ease their financial burden and help them retain their health coverage in the coming months.
