The expiration of enhanced premium tax credits could increase health insurance costs for over a million Californians.
SACRAMENTO, Calif. — As the federal government shutdown continues, concerns are growing over how much Californians could soon be paying for health insurance.
Enhanced premium tax credits, which have lowered premiums since 2021, are set to expire at the end of the year. The credits are now a key sticking point in budget talks in Washington, D.C.
More than a million Californians could see higher health care costs if Congress doesn’t act, according to Covered California.
Jessica Altman, Covered California’s executive director, said, “We estimate as many as 400,000 of our current enrollees will be forced to drop coverage as a result, and that is not the only impact. Those that remain will pay more.”
Altman added that without renewal of the federal tax credits, premiums could nearly double on average for many consumers.
Open enrollment for Covered California begins November 1, and Altman warned that unless Congress takes action soon, people will start receiving notices based on the higher rates.
“Unless Congress acts really right now, we have to move forward with an open enrollment based on that expiration. People will get those letters. People will make really hard choices about their health insurance,” Altman said.
Sacramento Democratic Congresswoman Doris Matsui joined Covered California officials Friday, calling for lawmakers to act quickly.
“This shutdown is a direct result of Republicans putting themselves and their political agenda above the people that they are elected to serve. Democrats will not let that stand,” Rep. Doris Matsui said.
But not all lawmakers agree. Republican Congressman Tom McClintock argued that health care subsidies should not be tied to the shutdown and went further to suggest that they should be allowed to expire.
“Allowing these subsidies to expire would simply return to the original Obamacare premium levels. For example, a single individual earning $40,000 a year will still only pay $2,700 a year for health insurance with taxpayers picking up the other $5,400 of that cost,” Rep. Tom McClintock said.
According to Covered California, middle-income residents making more than $62,600 annually would pay about $500 more per month on average if the subsidies expire.