If you’re relying on Covered California for your health insurance, you may wonder if Covered California premium subsidies will expire in 2026. The answer could seriously affect your budget. With major policy changes looming, millions of Americans who benefit from reduced premiums under the Affordable Care Act (ACA) might soon be paying a lot more.
Skyline Benefit, California’s trusted health insurance broker, helps individuals and families stay informed and prepared for changes to Obamacare coverage and costs.
However, in this blog, we’ll explain what’s happening with the ACA premium subsidies, what it means for your coverage in 2026, and what steps you can take to plan ahead.
What Are Covered California Premium Subsidies?
Covered California premium subsidies, called premium tax credits, are designed to make Marketplace health insurance plans more affordable. These subsidies lower your monthly premium based on your income and household size.
However, under the Inflation Reduction Act, enhanced subsidies were extended through the end of 2025, allowing many Americans to pay $10 or less monthly for coverage.
Why Are the Subsidies Set to Expire After 2025?
The enhanced ACA subsidies were only temporarily extended. Unless Congress acts, these tax credits will revert to their pre-pandemic levels in 2026.
According to the Congressional Budget Office (CBO), making the enhanced subsidies permanent could increase the federal deficit by $335 billion over ten years. For this reason, the new administration may let them expire as part of broader cost-cutting efforts.
How Could This Impact Your Marketplace Plan?
Potential enrollment drop: If subsidies expire, the CBO projects a decrease from 21.3 million enrollees in 2025 to 15.7 million in 2026.
Higher premiums: Many consumers paying minimal premiums could see monthly costs skyrocket.
Risk of being uninsured: Some may be priced out of the market entirely, especially older adults and low-income families.
Who Will Be Most Affected If Subsidies End?
If Covered California subsidies expire in 2026, these groups could be hit hardest:
- Low-to-middle income households
- Self-employed individuals and freelancers
- Pre-retirees under age 65
What Can You Do Now to Prepare?
1. Review Your Coverage Early
Start comparing 2025 plans during open enrollment. Understand your costs with and without subsidies.
2. Talk to a Certified Broker
Skyline Benefit licensed agents can help you explore all available options, including private plans and employer coverage.
3. Monitor Congressional Updates
Keep an eye on subsidy extension proposals. A change could happen quickly, so be ready to act if it does.
4. Reassess Your Income Estimate
Make sure your income reporting is accurate for 2025. Over- or under-estimating could result in unexpected tax bills.
Final Thoughts: Will Covered California Premium Subsidies Expire in 2026?
The future of Covered California premium subsidies in 2026 is uncertain, but it’s clear that big changes are possible. Whether you’re already enrolled or thinking about signing up, now is the time to understand your options and plan ahead.
Need Help Understanding Covered California Premium Subsidy Options for 2026?
Skyline Benefit is a certified Covered California insurance agency dedicated to simplifying your health insurance journey. Our team will guide you through every change, every step and stay informed on subsidy updates, and prepare for what’s next.
Schedule a consultation today. Call us at: (714) 888-5112