A growing number of Californians are transitioning to lower-tier health plans or forgoing coverage entirely due to the expiration of enhanced federal subsidies. This trend is particularly evident among middle-income individuals, prompting concerns about access to medical care and the financial burden on consumers. Data from Covered California indicates a substantial decline in new sign-ups and an uptick in plan cancellations.
Approximately 130,000 Californians renewing their coverage have opted for bronze plans instead of silver or higher-tier options. “Many Californians see the value in remaining covered, but they had to make sacrifices and shift to lower-tier plans. We see it as a commitment to health and the value that Covered California provides,” stated Jessica Altman, executive director of Covered California.
While bronze-level plans provide some reassurance, they often come with high deductibles and copayments that can deter individuals from seeking necessary care. Miranda Dietz, director of the Health Care Program at the UC Berkeley Labor Center, noted, “Those out-of-pocket costs do impact people’s decisions to get care, so that’s worrisome as well.”
The change in coverage options stems from a decision by Congress not to extend the enhanced subsidies, leaving individuals earning above 400% of the federal poverty level—$62,600 for individuals and $128,600 for a family of four—without premium assistance. As a result, many have opted for plans with cheaper premiums or have dropped their marketplace plans altogether.
Among the 224,000 middle-income enrollees set to renew their plans, 22% cancelled their coverage, according to Covered California. New sign-ups for this income bracket plummeted by 59% compared to last year. The sustainability of coverage among those who renewed or newly enrolled remains uncertain, with a clearer picture expected around April.
“Once you actually face the prospect of paying that premium and the stress that puts on your budget, it’s entirely possible that some of those folks may fall off, and the numbers might go down,” Dietz added. It remains unclear whether people who cancelled their marketplace health plans are opting for alternative insurance options. Data from Covered California over the last five years indicates that when individuals terminate their marketplace plans, between 10% and 14% report becoming uninsured.
The Affordable Care Act’s enhanced premium subsidies, initially enacted in 2021 as part of the federal response to COVID-19, significantly reduced insurance costs for millions of Americans, especially middle-income earners. These subsidies allowed individuals to qualify for financial assistance for the first time, capping premiums at 8.5% of income. With the expiration of these enhancements, lower-income enrollees still qualify for standard federal premium aid, which has been available since the ACA marketplaces launched. Additionally, California allocated $190 million in 2026 for state-funded tax credits aimed at individuals earning up to 165% of the federal poverty level—$25,823 for individuals or $53,048 for a family of four—averaging around $45 per month per enrollee.
The cessation of enhanced federal subsidies coincides with a troubling trend: polls conducted by the California Health Care Foundation reveal that four in ten Californians carry medical debt, and six in ten report skipping medical care due to costs. Furthermore, eight in ten residents emphasize that making health care affordable is an “extremely” or “very” important priority for state officials and lawmakers in 2026.
The impact of these subsidy changes raises critical questions about the future of health care access in California, particularly for middle-income families who may struggle to afford adequate coverage. As the state prepares for potential policy adjustments, the focus remains on ensuring that all Californians can access the health care they need without facing excessive financial burdens.
