Over 23,000 residents in Sonoma County and around 5,800 in Napa County may face significantly higher health insurance premiums next year if Congress doesn’t extend the pandemic-related premium subsidies, as indicated by Covered California, the state’s health insurance marketplace.
If these enhanced federal tax credits expire, individuals purchasing insurance through state exchanges could see average premium hikes of 89% in Sonoma County and 85% in Napa County.
Currently, in Sonoma County, the average monthly net premium stands at about $239, but without additional subsidies, it could rise by nearly $175. Similarly, in Napa County, the average net premium of $244 might increase by around $171.
The expanded tax credits originated during the COVID-19 pandemic and were set to continue until 2025. They limit premium costs to no more than 8.5% of household income, while also broadening eligibility to include middle-income earners who previously earned too much for assistance. These benefits are slated to end on December 31 unless Congress intervenes.
The discussion around these subsidies has turned contentious in Washington, D.C., where Democrats have declined to support a Republican-led funding bill that does not extend the expiring tax credits, leading to the longest federal government shutdown in U.S. history.
Potential Outcomes if the Enhanced ACA Tax Credit Expires
Changes on the horizon:
Federal subsidies that reduced health insurance costs for many Californians during the pandemic may come to a halt on December 31, 2025, if Congress does not take action.
How the program functions:
- Insurance premiums are capped at 8.5% of household income.
- Eligibility extends to those making over 400% of the federal poverty level.
- More than 90% of enrollees currently receive tax credits, according to Covered California.
North Bay impact:
- In Sonoma County, 23,000 residents could be affected, facing 89% premium increases.
- Napa County may see 5,800 residents impacted with an 85% increase.
- About 4,190 residents in Sonoma and 1,040 in Napa could lose all aid.
- On average, the monthly subsidy loss could be around $500 per household.
Statewide effects:
- Approximately 400,000 individuals could lose their insurance, which represents about one in five people on the exchange.
- California has set aside $190 million in state funds to alleviate tax hikes, but federal aid amounts to about $2.5 billion each year.
What to keep in mind:
- Consider purchasing early: Check plan options at CoveredCA.com.
- Update income records to ensure qualifications for remaining tax credits.
- Enrollment period is from November 1 to January 31, 2026.
Jessica Altman, executive director of Covered California, shared in an interview that the average health insurance premium across the state is approximately $700 per month. Fortunately, over 90% of subscribers receive federal tax credits, reducing their average payment to about $150. However, if the enhanced tax credits vanish, their monthly costs could leap to around $300.
Loss of Subsidies for Thousands
Before 2021, the Affordable Care Act offered premium tax credits on a sliding scale for individuals earning between 100% and 400% of the poverty level. During the pandemic, Congress made these tax credits more robust and eliminated the income eligibility “cliff,” allowing middle-income earners to qualify for assistance.
This change means that, once the enhanced tax credits expire, middle-income residents will be responsible for the full amount of their health insurance costs. In Sonoma County, about 4,190 enrollees will lose all subsidies and must cover their full monthly premiums, while in Napa County, that figure is around 1,040.
For instance, a middle-income family in Sonoma County currently benefits from a $506 subsidy toward their $988 premium. In Napa, the average subsidy stands at $482 for a premium of $968, which would significantly increase costs for local residents.
According to Altman, a person making $70,000 annually could see their costs dramatically rise if they lose all tax credits, jumping from paying less than 8.5% of their income to the entire premium amount.
Altman mentioned there’s still a chance Congress might find a way to extend the enhanced tax subsidies amidst the ongoing government shutdown. Notifications regarding potential premium changes started going out in mid-October.
“We’re prepared to act quickly if a compromise is reached in Washington,” she added.
Regional Impacts and Looking Ahead
This week, the Press Democrat sought to gauge how monthly insurance premiums have changed for readers. One individual reported a 12% increase for a family plan, while another noted an alarming hike of $2,500 monthly.
Currently, around 25,740 residents in Sonoma County and 6,440 in Napa County hold health insurance from Covered California. Altman indicated that almost 400,000 of the two million members across the state could find themselves without health insurance if subsidies expire, indicating that over 6,000 residents in the North Bay could abandon their plans under local conditions.
She emphasized that Covered California generally offers the most affordable insurance options for many, provided people’s income situations don’t change drastically.
“Those willing to shop around might discover cheaper plans elsewhere within Covered California,” Altman noted.
She also pointed out that the average premium increases in Napa and Sonoma counties could exceed $170, although some residents might experience smaller hikes. While the state has set aside $190 million to mitigate this situation, it can’t replace the federal loss, estimated at about $2.5 billion annually.
Both counties have experienced nearly a 12% rise in enrollment since the enhanced tax credits were approved in 2021. The general enrollment window for insurance for 2026 opens on November 1 and concludes on January 31, 2026. Altman stated that officials aim to be transparent about the impending premium increases and the discontinuation of enhanced tax credits.
“It’s not easy for people to accept rising costs, especially for something as vital as healthcare,” she remarked, acknowledging the difficulty of the situation for many individuals.
“Still, this is not the final outcome,” Altman concluded. “There’s always the potential for a compromise in Washington that could alter the trajectory.”
