Estimated reading time: 5 minutes
Insurance premiums soar
When the federal health care subsidies that helped keep monthly premiums low for millions of Americans expired in December 2025, new enrollments in Covered California fell sharply. Only about 175,000 people have signed up so far – a 30% decline compared to this time last year, say state officials.
Experts at a January 16 American Community Media briefing on the soaring costs reshaping healthcare access attributed the decline to a doubling of premiums when the subsidies expired in January. In many cases, said Anthony Wright, Executive Director of Families USA, it amounted to “a tripling or a quadrupling” for middle and low-income families who relied on the advance tax credits to lower their monthly premiums.
Couples in their 50s and 60s now have to pay more than $10,000 to $15,000 for their coverage this year, explained Wright. Many people who renewed automatically into their healthcare plans will fall off of coverage in the coming months when they are unable to pay higher premiums; others will drop down to lower-tier coverage with sky-high deductibles.
This is just the tip of the iceberg in terms of impact, added Wright.
Impact in California
In the Bay Area, new enrollment fell 27% in Contra Costa County, 24% in Alameda County, and 23% in Santa Clara County. After the extra assistance was eliminated, the average Covered California plan doubled in cost for 2026, according to state officials. Middle-income households and adults nearing Medicare eligibility saw the largest increases, with monthly premiums jumping from $186 to $365.
In a story for the New York Times, Caroline Hanssen, 57, San Anselmo, California, dropped her insurance because her premium went from $406.47 in 2025 to $1,122.99 per month for bronze (lowest level) coverage.
As healthier people like Hanssen abandon coverage, insurers are left with a sicker, more expensive pool – forcing higher premiums for everyone else. William Thompson of Charlottesville, Virginia, is experiencing this firsthand. Though Thompson did not qualify for the subsidies last year, his premiums increased by more than $650 a month this year.
Wright expects many Americans will try to pay their premiums, which will add up to hundreds or thousands of dollars more in the next few months, but cautioned that they will forgo other necessities or end up uninsured.
A Systemic Impact
Wright warned that healthier folks falling off insurance coverage would place financial stress on the healthcare system as a whole. Community clinics, hospitals, and other providers that have more uninsured and fewer paying patients would be forced to scale back on services. A decline in compensated care would impact “their ability to keep their doors open,” he explained.
The ACA Marketplace
First signed into law as part of the American Rescue Plan in 2021, enhanced advance premium tax credits expanded federal subsidies for Affordable Care Act marketplace enrollees, lowering monthly health insurance premiums. The additional assistance targeted low- and middle-income people who lack employer-sponsored or other government coverage, including small business owners and employees, farmers and ranchers, and those who are self-employed.
In 2025, more than 20 million Americans selected an Affordable Care Act (ACA) Health Insurance Marketplace plan as of 2025. Nationwide, 93% of ACA Marketplace enrollees received premium tax credits in 2025.
US Healthcare costs double over two generations
Today, the United States spends a larger share of resources on healthcare than any other country in the world, said Dr. Neal Mahoney, Professor of Economics at Stanford University. Over the last two generations, US healthcare expenditure has doubled from about 8% to about 18% of our gross domestic product (GDP).
Though the federal government “rightfully covers close to 50% of our healthcare costs, because it’s unaffordable for millions of families, “that means we have less resources for other worthy endeavors,” he pointed out.
Impact on families, businesses & the job market
For families this year, the average cost of health insurance to which employers make significant contributions is $27,000. But out-of-pocket premiums have increased much faster than wages for employer-sponsored insurance, so the deductibles employees have to pay until health insurance kicks in, “have risen dramatically.”
Small businesses providing health insurance feel the impact on their bottom line, added Dr. Mahoney. When healthcare costs rise, small businesses lower the wages for workers or reduce the wage offering to new hires; worse, they lay off workers, or stop hiring. “Right now, we have a completely frozen labor market.”
The last option for small businesses is not provide health insurance to their workers, which creates stress and impacts productivity in the workforce. “I don’t think we’ve connected the dots yet from rising healthcare costs to a frozen labor market, but certainly the body of evidence we have suggests that higher healthcare costs mean lower wages and less jobs,” he stated.
High cost of medication
“The reality is that 1 in 3 Americans and people in this country cannot afford to pay for their prescription drugs,” said Merith Basey, Patients For Affordable Drugs. Americans are paying between 4 and 8 times, on average, what patients in other high-income countries are paying for the same brand-name drugs.
The pharmaceutical industry is abusing the patent system by setting launch prices and controlling the market through monopolies, a practice that Congress has allowed until recently. The industry uses tactics like patenting the delivery devices, like pens and needles, making it much harder for generics to enter the market. They also use “pay-for-delay” tactics, paying generic manufacturers to postpone bringing their products to market.
Recent polling has shown that 47% of people in this country are concerned that they’re not going to be able to pay for their healthcare costs in 2026, said Basey. But, “If you have 5 or 6 competitors, you’re going to see a reduction in those prices by about 95%.”
Drugs don’t work if people can’t afford them, Basey remarked. 80% of Americans support patent reform, and 9 out of 10 Americans want Congress to do more to lower drug prices. But does Congress have the will to make it happen?
After a presidential election focused on affordability, healthcare for working families should be a no-brainer for every member of Congress, say the experts.