Enhanced federal tax credits helped more than 30,000 San Diegans gain health coverage through Covered California since 2021, according to the state health insurance exchange. Those subsidies expired on December 31 and early data show the change is already affecting who is signing up and how much they are paying as the open enrollment deadline approaches, state officials say.
The subsidies expanded eligibility and reduced monthly premiums, particularly for middle-income households, according to Covered California Executive Director Jessica Altman. With their expiration, many consumers are now navigating higher costs and fewer financial protections.
There has been confusion around the change, she said.
“We do still have tax credits in 2026, no matter what Congress does, and most people are eligible for them. The tax credits that were enhanced made them more generous, right? Giving more tax credits to people receiving them,” Altman said.
Overall enrollment remains near record highs, with nearly two million people enrolled statewide, Altman said. But fewer people are signing up for the first time compared to last year.
“New enrollment, like the rest of the state, is down about a third in San Diego,” she said.
Covered California is also seeing more people cancel coverage or switch to lower-cost plans with higher deductibles. That trend is mostly among middle-income earners.
“This middle-income group who's losing all tax credit eligibility and facing the full cost of the premium, and that's an average increase of $500 per month,” she said.
While many consumers are staying insured, they are making trade offs, Altman said.
“Having a high deductible has negative outcomes associated with it. That can be a very big cost burden. It can cause people to not seek care they would otherwise. On the other hand, they are staying covered,” she said.
The long-term impact could extend beyond health care, affecting how people work and support their families, Altman said.
“We will start to see the people who say, ‘I need health insurance, and the only way that I can do it is to close my small business and go back to a large employer that offers coverage’” she said. “‘Or the only way I can do it is go back to full-time and figure out a less ideal plan for childcare or the care of my aging parent.’”
Open enrollment for Covered California runs through January 31. Free enrollment assistance is available online, by phone, and through local community partners to help consumers understand their options.
