Shutdown Gridlock Threatens Affordable-Care Subsidies for Nearly 2 Million Californians
SACRAMENTO, Calif. — As the federal government shutdown stretches into its 27th day, California leaders are warning that millions could soon see sharp hikes in health-insurance premiums if Congress fails to act.
Nearly 2 million Californians get their coverage through Covered California, the state’s Affordable Care Act marketplace. But a key source of financial help — enhanced premium tax credits — is set to expire at the end of the year unless lawmakers reach a deal in Washington.
“[Covered California allows people to] shop around from a number of name-brand health-insurance plans and in most cases receive a tax credit to help pay for coverage,” said Jessica Altman, executive director of Covered California.
Eligibility for the program relies heavily on income. Altman said it’s often those who don’t get health insurance from sources like employers that seek enrollment.
Enrollment jumped 24 percent in 2021, when Congress temporarily removed income caps and expanded eligibility during the COVID-19 pandemic. The policy ensured no one paid more than 8.5 percent of household income for health coverage, Altman said.
Altman added that those expansions “allowed middle-income consumers to get tax breaks for the first time,” but warned that their end would bring sticker shock.
About 160,000 current enrollees would be affected, Altman warned.
Covered California has already notified at least 400,000 enrollees that their monthly premiums could surge.
“What people on Covered California actually pay each month will rise an average of 97 percent,” Altman said. For a typical member paying $182 a month, that means costs could rise [by more than $100].”
The political stalemate over renewing the subsidies has intensified amid the ongoing shutdown.
Democrats argue the credits are vital to keeping insurance affordable, while Republicans contend they were meant to be temporary pandemic relief.
“We need to have some sort of temporary extension of the existing subsidies,” said Rep. Kevin Kiley (R–Rocklin). “But ultimately we can’t continue to have healthcare costs in this country continue to grow.”
Kiley emphasized the ongoing stalemate is “unacceptable.”
Open enrollment for Covered California begins Saturday, November 1. That means new enrollees could come, resulting in higher demand, despite the uncertain future of the program.
Watch more: Government shutdown reaches fourth week with no deal to reopen
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