Rising Health Care Costs Challenge Californians
For Mikayla Tenser, self-employment already involved managing high taxes, variable income, and the ongoing task of securing her own health insurance. This year, she also found herself reconsidering how frequently she visits her doctor.
The 29-year-old content creator from San Francisco paid $168 monthly for a Blue Shield plan through Covered California last year. However, with the expiration of enhanced federal aid at the end of December, the same plan would now amount to $299 a month and come with higher out-of-pocket costs.
“Many people assume that because I’m young, choosing the cheapest plan is the way to go,” Tenser noted. “But young individuals still need regular care, especially concerning mental health.”
Tenser is among thousands of middle-class Californians facing escalating health care costs after Congress allowed expanded federal aid under the Affordable Care Act to lapse.
These subsidies were introduced in 2021 as a part of temporary relief for the pandemic, aimed at providing extra financial help for those purchasing insurance through state marketplaces like Covered California. The laws also broaden eligibility for individuals earning more than 400% of the federal poverty line, roughly $62,600 for a single person and $128,600 for a family of four.
As the enhanced subsidies fade, those who earn above this threshold will lose federal assistance, and many still eligible are seeing steep increases in premiums and out-of-pocket expenses. This year, California’s average premiums have risen by 10.3% due to a combination of lost federal benefits and rising health care expenses.
To cut her monthly bill, Tenser opted for the least expensive option covered in California, bringing her premium down to about $161. But those savings came with new expenses; copays for primary care and mental health visits jumped from $35 to $60.
When she visited a psychiatrist for managing her ADHD and anxiety, she was shocked to discover her doctor network was fragmented.
“I used to pay $35 for that visit,” she recalled. “Now it costs me $180.” As a result, she had to reduce her treatment frequency from weekly to biweekly.
“The grant was why I became self-employed in the first place,” she explained. “Without that support, I might seriously consider looking for a full-time job, even in a tough market.”
Another self-employed Californian faced an even steeper increase.
Krista, a 42-year-old photographer and videographer in Santa Cruz County, depends on costly monthly intravenous treatments for a rare blood disorder. She shared her insurance and medical documents with the Times but chose not to reveal her entire name.
Last year, she paid approximately $285 monthly for her Covered California plan. By late December, she received a notice indicating her premium would soar over $1,200 per month due to the loss of federal subsidies and a 23% rise in premiums from Blue Shield.
“It was terrifying. I wondered how I could ever retire,” she remarked. “What does that even mean?”
Ultimately, she opted for a plan costing around $522 per month, still nearly double what she paid previously, along with a $5,000 deductible. Given that her clinic bills about $30,000 monthly for treatment, downgrading to a less expensive plan wasn’t an option for her.
To manage her expenses, save for retirement, and ultimately purchase her own home, Krista made the significant decision to live in an RV on private property. This choice came the same week she received notices about soaring rent and health insurance premiums.
Krista had been planning for over a year to secure a sustainable living environment for herself, rather than continue paying exorbitant apartment rents. “Nobody wants to get sick,” she stated. “No one should face a life-altering diagnosis or injury.”
Jessica Altman, executive director of Covered California, mentioned that around 160,000 Californians lost their subsidies when enhanced federal aid came to an end, as their incomes exceeded the 400% federal poverty threshold.
Altman expressed concern that while enrollment among eligible Californians remains stable, rising premium bills might push more individuals to drop their coverage.
These worries are already coming to pass.
Jamie Wernicke, 34, a receptionist and single mother from Chico who earns about $49,000 annually, was transitioned from Medical State to Covered California’s Anthem Blue Cross Plan at the end of 2023. Her premiums escalated from roughly $30 a month to $60 and then surged to around $230 after the subsidy ended.
“It’s outrageous that they’d raise my health insurance by nearly 400 percent,” Wernicke commented.
Her employer, a small family business, doesn’t offer health insurance. Her plan lacks dental and vision coverage and barely meets medical expenses.
“It just feels absurd,” she reflected. “No matter how I look at it, I’m losing.” She plans to forgo insurance and pay for medical bills directly, figuring that the state tax penalty would be less than her premiums. Her daughter, however, remains insured.
Two other California residents shared similar stories with the Times, indicating they too had opted out of insurance due to unaffordability but declined to give full names due to potential financial and professional consequences.
California law imposes yearly fines of at least $900 per adult and $450 per child for the uninsured.
The first is a 29-year-old self-employed publicist from Los Angeles requiring epilepsy treatment. Last year, she paid about $535 monthly for a silver plan through Covered California. This year’s equivalent plan will cost $823.
With an income of about $55,000 last year, she determined that paying out-of-pocket for medical expenses would be cheaper. Her epilepsy treatment costs approximately $175 every three months without insurance, and annual doctor visits total around $250.
“In the end, that’s far less than a few hundred dollars a month,” she noted.
Another business owner, April, 58, from San Francisco, canceled her insurance in December. Her premiums skyrocketed to $1,151 per month for the Bronze plan and $1,723 for the Silver plan. Last year, she had paid $566 for her and her daughter’s coverage, but this year, her daughter’s premiums alone jumped from $155 to $424.
The Bronze plan also carried a $3,500 deductible for tests and specialist visits, adding to her rising expenses before any coverage could begin.
“That grant really helped me keep my business afloat,” April emphasized. “It allowed me to stay financially viable and receive necessary treatment.”
Now, she is rushing to get a medical exam before her insurance lapses and hopes to remain uninsured for a year.
“What scares me the most is being without crucial coverage,” she admitted. “If something goes wrong, it could lead to massive debt.”
Tenser, reiterating her stance, believes that health care should be universally affordable for the sake of the nation’s health.
“The government should provide it,” she stated. “People can’t go for regular checkups, access early testing, or get the help they need when it matters most.”
