Health insurance premiums for many enrollees in Covered California are set to see substantial increases, with some individuals facing costs that could triple starting January 1, 2025. Tara and Todd Nicklous, a couple from Castro Valley, California, were shocked to learn that their monthly premium for coverage through the Affordable Care Act (ACA) will rise from $923 to a staggering $3,264.
Tara Nicklous, aged 56, expressed her distress upon receiving the news. The couple, who operate a real estate appraisal business, had previously qualified for financial assistance under the ACA, which was expanded by former President Joe Biden during the COVID-19 pandemic. Those tax credits, however, are set to expire at the end of this year, contributing to the sharp rise in premium costs.
As discussions regarding a potential federal government shutdown continue, Democrats insist that extending these tax credits is essential, while Republicans have refused to engage in negotiations until the government reopens. This political stalemate has left many enrollees worried about their health insurance costs.
Tara has been undergoing treatment for a blood cancer for over a decade and noted that the couple had saved money to cover the upcoming premium hike. “We’re hunkering down,” she remarked, indicating the financial strain this increase will impose.
Projected Premium Increases Impacting Millions
According to data from Covered California, approximately 2 million residents rely on the marketplace for subsidized health insurance. The organization has projected that, on average, premiums will double in cost by the end of 2025, with many middle-income individuals seeing their premiums increase even more dramatically.
Larry Levitt, a health policy executive at KFF, stated that enrollees in the Bay Area are likely to be taken aback by these new prices. The demographic most adversely affected includes individuals in their 50s and 60s who have not yet qualified for Medicare. The Nicklouses, who currently have coverage through Kaiser Permanente, are among those facing these challenges.
This summer, Tara Nicklous revealed that her hospital, Stanford Medicine, billed Kaiser more than $5 million for her T-cell therapy. Given this context, the couple feels compelled to meet the new premium demands, despite the financial burden.
The Urban Institute reports that about 400,000 Californians could lose their eligibility for Covered California due to these policy changes, with an estimated 175,000 individuals potentially priced out of insurance coverage entirely.
Rep. Eric Swalwell, a Democrat representing the East Bay area, criticized Republican lawmakers for their role in the escalating costs. He stated, “For weeks, Democrats have been warning that leaving health care out of this funding bill would raise costs for millions of Americans.”
State Assistance and Rising Healthcare Costs
In response to the impending expiration of federal tax credits, California officials have announced plans to provide limited assistance. The state intends to allocate approximately $200 million in state tax credits for low-income residents who earn slightly above the threshold to qualify for Medi-Cal, California’s version of Medicaid. Covered California has specified that this threshold is around $25,800 annually for a single person.
As enrollees prepare for the open enrollment period from November 1 to January 31, they are becoming increasingly aware of the significant cost increases. Health insurers in California are raising 2026 premiums by an average of 10%, citing rising healthcare delivery costs and the increased demand for expensive treatments such as the weight-loss drug Ozempic.
Kaiser Permanente, California’s largest private insurer, has announced a 7.1% increase for Covered California plans, though a spokesperson indicated this was lower than many competitors. Anthem Blue Cross has taken a more aggressive approach, raising rates by 14.5%. A representative noted that many ACA enrollees are utilizing emergency rooms for care at rates twice that of those with employer-sponsored insurance plans.
John Murphy, chief medical officer at La Clínica de La Raza, expressed concern that higher costs and loss of insurance tend to lead to poorer health outcomes. Patients often delay preventative care when it becomes unaffordable, ultimately resulting in greater reliance on emergency services.
The financial implications of these changes are significant. For the Nicklouses, adapting to the new realities means altering their spending habits. “We’re changing our shopping and our eating habits,” Tara Nicklous shared. “I’ve never been such a Walmart and Costco shopper. Vacations? Forget it. Maybe camping.”
As open enrollment approaches, the fate of health insurance premiums hangs in a precarious balance, shaped by political negotiations and the broader dynamics of healthcare funding in the United States.
