Californians are facing another substantial increase in health insurance premiums for 2027, with the state's marketplace, Covered California, announcing an average rise of 9.9%. This follows a 10.1% increase in 2026, marking the steepest consecutive hikes in nearly a decade.
Some regions within the state could see increases as high as 15%, with San Jose-based Valley Health Plan projecting a 20% jump. Covered California officials attributed the rising costs to several factors, including increased healthcare spending and changes in federal policy.
Jessica Altman, Executive Director of Covered California, stated that the federal administration has made accessing affordable, high-quality health insurance more difficult. Specifically, she referred to the loss of federal subsidies that assist families with premium payments. According to state officials, approximately 8% of the premium increase is due to rising healthcare spending, while about 2% is linked to federal policy changes.
In response to affordability concerns, state officials have expanded their subsidy program from $190 million to $300 million, asserting that 60% of enrollees will not experience an increase in their monthly premiums. Despite these efforts, enrollment in Covered California decreased by nearly 9%, or about 170,000 people, from April 2025 to April 2026.
An additional burden on individuals with private health insurance plans may come from a new healthcare tax enacted in Governor Gavin Newsom's recent budget. This tax could add an average of $100 annually to individual plans and $400 annually to family plans. Congressman Kevin Kiley and five other Republican representatives from California have formally requested that the Trump administration halt this tax, arguing that it further exacerbates the cost of living for Californians.
"I hope that California taxpayers can be spared yet another increase in our cost of living that so many Californians simply cannot afford because of the extreme policies coming out of Sacramento," Kiley said.