Covered California Rates To Jump Nearly 10% In 2027

Health insurers are set to increase rates for plans sold through Covered California by an average of 9.9% in 2027, marking the second consecutive year of significant hikes. This follows a 10.1% increase that took effect on January 1, 2026. The rising rates coincide with the expiration of federal subsidies, leading to a drop in marketplace enrollment by about 170,000 people. Covered California, the state’s health insurance marketplace under the Affordable Care Act, faces these challenges as healthcare spending rises.

According to Covered California officials, about 8 percentage points of the increase are due to rising healthcare costs, while 2 percentage points result from federal policy changes. Hospitals, doctors, and prescription drugs are becoming more expensive, and the expiration of $2.5 billion in annual federal assistance is straining the market. This has led to healthier customers dropping coverage, leaving a smaller pool of sicker, costlier individuals to insure.

Jessica Altman, Executive Director of Covered California, highlighted that approximately 10% of customers will bear the full brunt of the price increases, as they earn more than 400% of the federal poverty level and do not qualify for subsidies. “Those people are just being hit incredibly hard,” Altman said.

Governor Gavin Newsom and state lawmakers have expanded state funding for subsidies, setting aside $300 million to assist low-income insurance buyers. This funding aims to prevent 90,000 people from dropping their coverage in 2027. However, Californians above the subsidy cutoff will face the full rate increase.

Kaiser Permanente’s plans will rise less than the state average, increasing by 6.7% in 2027, while Anthem Blue Cross plans will see a 13% hike. Cynthia Cox, senior vice president at KFF, noted that health spending is increasing at a historic pace, contributing to higher premiums.

Despite these challenges, Covered California continues to offer affordable options, with 12 carriers providing plans across the state. The marketplace remains committed to affordability and access, showcasing California’s leadership in advancing the goals of the Affordable Care Act.