Health insurance increase of $1,100 (or around $4,000 for a family of 4) creates big questions

Jorge Destrade says nearly a year of “political hot air” morphed into some harsh financial reality this month, when he learned that the annual bill for his family’s health insurance will jump by about $4,200.

“I’ve got to answer a lot of questions I really wish I didn’t have to deal with,” said Destrade, a 58-year-old movie grip who lives in Echo Park.

“I’ve been trying to catch up on retirement. I was sick for several years and thought I was going to die. Then, when I didn’t die, it hit me that I have to save for retirement starting, you know, yesterday,” he said, laughing.

“This new health care (expletive) really, really doesn’t help.”

Destrade is one of about 2 million people in California, and roughly 24.3 million nationally, who last year bought insurance through some version of the Affordable Care Act, which in California is known as Covered California.

Since the height of the pandemic, most of those ACA customers – a group that ranges from low-wage workers and recent college grads to small business owners and farmers and independent contractors (like Destrade) – have used federal tax credits to help pay for their insurance.

That changed abruptly on Jan. 1, when the federal government officially discontinued so-called “enhanced” health insurance subsidies used by ACA enrollees who earn up to 400% of the local poverty level. The end of those specific tax breaks, plus premium increases that were coming as a result of inflation and other factors, are now translating into breathtaking spikes in the cost of health care.

For individual California Care enrollees who previously received subsidies and who make up to $62,000, insurance bills will jump by about $1,100 a year in Los Angeles, Orange, Riverside and San Bernardino counties, according to a study released this month by the Public Policy Institute of California. For a qualifying family of four in those same four counties – with income of up to $128,000 – the PPIC estimates insurance bills will spike by about $3,630 to about $4,300 a year.

And Southern California is getting off comparatively easy.

The PPIC report shows that family insurance rates in some counties in north and central California are jumping, on average, $11,000 a year, and that the biggest annual spike (in San Benito County) will run about $13,700.

And a national survey, by the nonprofit health research organization KFF, found that rates around the country are expected to jump by about 114% in 2026.

Even at the new prices, ACA/Covered California insurance generally is cheaper than non-subsidized policies for people who don’t get insurance through their employers and who don’t qualify for Medicare or Medicaid. And other subsidies – including a state fund of about $250 million, and roughly $2.5 billion in federal aid that hasn’t been discontinued and isn’t considered “enhanced” – will help keep costs down for the lowest-income enrollees, with some premiums available for about $10 a month, according to Covered California.

Still, the spikes that are coming, and that cover most working Covered California enrollees, are apparently enough to push a lot of people out of insurance altogether. The Bay Area News Group, citing Covered California data, reported this week that statewide enrollment is down by about 31% from a year ago.

Judy Sherman, a web designer who lives in Stanton and works in Long Beach, said she’s likely to skip insurance this year.

“I don’t qualify for the super cheap insurance, and I can’t afford what I do qualify for. So I’m kinda stuck,” Sherman said.

Sherman, 34, described her situation as “a scary choice.”

“I had a non-cancerous growth removed a few years ago. So I get screenings every year.”

But, she said, the new rates could push her to choose between car payments and insurance payments.

“I already live in about the cheapest place you can find around here. I’m not splurging,” she said.

“But if I have to go without screenings for a year, and if I stay healthy, I’ll be fine,” she added. “And, maybe, a year from now it’ll be different.”

The outlook for that is cloudy. Though a revival of insurance subsidies remains possible in Congress, the politics of the issue proved unmovable last year.

The enhanced subsidies that ended Jan. 1 were the subject of harsh debate before, during and after the July 4 signing of the Trump administration’s signature “One, Big, Beautiful Bill Act.” That spending plan, which cuts taxes long-term for high earners and reduces social spending on everything from food programs to housing, relies on ending health care subsidies.

Most Republicans who voted in favor of the spending bill argued that the enhanced health subsidies were too expensive to extend and noted that they were passed as a temporary measure during the pandemic. Democrats, who voted against the spending bill, disagreed, saying the insurance subsidies are a kitchen table issue for working- and middle-class voters.

The impasse led to a government shutdown that lasted a record 43 days.

Now, it’s possible health subsidies might make a political comeback. This month, as insurance rate changes are becoming known nationally, negotiations over federal subsidies resumed in the Senate. But several reports note that talks have stalled, in part over disagreements about abortion funding. And it’s unclear if a vote to revive the subsidies, and possibly reduce or roll back insurance bills, will happen this year, if at all.

The reality, for Destrade, is a simple bit of math. At his house, the new rates translate into about $350 more per month for insurance, bringing his family premium to about $940 a month.

“I’ll figure it out. I’ve got a couple things this year that will make it work,” Destrade said. “But I can’t take another jump like this. I’m too old to skip insurance, but the choices would get pretty stupid.

“And if either of my kids were in the workforce right now,” he added, “they’d really be hurting.”

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