Patients Subsidies Expiring Jan 1 HDHP Enrolment Surges 37% in 1 Week
Patients across the state are increasingly choosing health insurance plans with higher deductibles as a way to keep monthly premiums down, amid growing expectations that enhanced federal tax credits are set to expire.
With just days remaining before the December 31 deadline to secure coverage starting in January 2026, residents are being forced to make difficult decisions about their health insurance. Lawmakers have yet to reach agreement on extending the Affordable Care Act subsidies that have helped millions offset premium costs since 2021. With Congress adjourned until the New Year, the likelihood that those tax credits will lapse has prompted concern among insurers and consumers alike.
Covered California Executive Director Jessica Altman said the impact is already visible. As of December 20, only 123,461 Californians had enrolled in coverage for 2026, a drop of about 30 percent compared with the same point last year.
“What we’re seeing is people moving into plans with lower monthly premiums, which makes sense because that’s where the tax credits apply,” Altman said. “But those plans usually come with much higher deductibles and out of pocket costs. People feel they have to accept that tradeoff just to afford coverage.”
Patients Subsidies Expiring Jan 1
The potential consequences are particularly significant in Santa Barbara County. According to Covered California, 20,220 of the 22,160 county residents enrolled through the exchange currently receive financial help paying their premiums. Since enhanced subsidies were introduced in 2021, enrollment in the county has risen by 28 percent.
Altman said the average monthly premium paid by Californians is currently about $150. Without the enhanced tax credits, that figure is expected to rise to around $300, although the exact increase will depend on household income.
“If the enhanced tax credits expire, we are very concerned that some people will simply say they cannot afford coverage anymore and go without insurance,” Altman said. “That is frightening for people, not just for their health but for their financial security and peace of mind.”
She warned that the effects would extend well beyond individual households. Patients who lose coverage may delay or skip preventive care, increasing the risk of serious and costly health conditions later on. Over time, that could strain the wider health care system.
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Providers may see fewer insured patients, Altman said, which could force hospitals and clinics to cut services or reduce staffing, particularly in areas that already operate on thin margins.
“It may take years to fully see how these policy changes reshape the system, but they can significantly stress health care providers, especially those that serve as part of the safety net,” she said. “These impacts do not stop with people on Medi Cal or Covered California. They affect entire communities.”
To have coverage in place for January, consumers must enroll by December 31. Open enrollment for the rest of 2026 continues through January 31.
Residents can compare plans and estimate monthly premiums using the shop and compare tool at CoveredCA.com. Free assistance is also available by calling Covered California at 800 300 1506.
