LOS ANGELES — Millions of Californians are on the brink of a financial squeeze as health insurance premiums are set to surge following the expiration of the Affordable Care Act’s enhanced tax credits at the end of December. The subsidies, which have reduced healthcare costs for countless Americans over the past years, are ending at a moment when many households are already balancing rent, food, and other essential costs.
According to Covered California, the state’s health insurance marketplace, the average premium increase for nearly two million residents will approach 97 percent. However, the increases are disproportionately affecting communities of colour. African-American residents could face premium jumps averaging 106 percent, while Latino Californians may see costs rise by as much as 122 percent. Analysts warn that such hikes may push many families to abandon insurance coverage altogether, leaving them vulnerable to catastrophic medical expenses.
Jan Spencley, executive director of the advocacy group San Diegans for Healthcare Coverage, criticised the timing of the cuts. “This is not about saving money. It’s about people’s health. Without these subsidies, millions will be forced to make impossible choices,” she said. Spencley stressed that the increased costs could have a ripple effect, forcing people to prioritise housing and food over vital medical care.
Already, new enrolments in the state’s marketplace have dropped by more than 30 percent compared to last year, suggesting that many Californians are delaying coverage or considering going uninsured. Jessica Altman from Covered California noted the widespread confusion. “Many people simply do not know how they will afford premiums starting in January,” she said.
For those who do retain coverage, the cost increase comes with reduced benefits, including higher deductibles and co-pays. Spencley compared the situation to a form of “Russian Roulette” with healthcare, emphasising the precariousness of maintaining insurance during this period.
Congressional efforts to extend the expiring tax credits have so far been unsuccessful. House Democrats submitted a petition for an emergency vote to prolong the subsidies, but House Speaker Mike Johnson has indicated that no action will be taken until lawmakers return from their holiday recess in January, leaving millions exposed.
Experts warn that this situation could trigger a broader public health challenge, as uninsured individuals may delay care, potentially exacerbating medical conditions and creating long-term costs for both families and the healthcare system. For now, Californian families face one of the toughest decisions of their year: pay rising insurance premiums or risk going without coverage in 2025.