SACRAMENTO, Calif. — Covered California announced its health plans and rates for the 2027 coverage year, with a preliminary weighted average rate increase of 9.9 percent and one new carrier entering the marketplace in 2027. Many enrollees can lessen the impact of increasing rates by shopping and switching to more affordable plans.
The proposed rate change can be attributed to many factors, including the increasing cost of health care and pharmacy expenditures alongside broader industry challenges. Additionally, actions taken by the federal government have driven up prices for consumers. Last year, federal lawmakers failed to extend enhanced federal tax credits that helped millions of Americans afford their monthly premiums. This year, the Trump administration cut eligibility for lawfully present immigrants, added administrative burdens to families applying for financial help and made it more difficult for gig workers who have to recalculate their income on an annual basis.
“The federal government and this administration have made it more difficult for hard-working Americans to access high-quality health insurance at a price they can actually afford,” said Covered California Executive Director Jessica Altman. “The fallout from these federal actions continues to reduce affordability and put health insurance out of reach for too many — something our state is fortunately counteracting.”
California is continuing to fight for affordability and health care access by adding more insurance options and expanding the state’s subsidy program that will help one in four enrollees reduce their monthly premium.
“Since Republicans have not been able to repeal the Affordable Care Act, this administration has instead tried to do all it can to weaken and spread misinformation about ACA marketplaces like Covered California. Unfortunately for them, it’s not working,” said Governor Gavin Newsom. “California continues to lead the way in providing vital access to affordable health insurance. Our original subsidy program was an inspiration for the enhanced premium tax credits nationally that expired at the end of last year, and our expanded state subsidy program shows a path forward to protect affordability for the most vulnerable Americans.”
Expanded State Subsidy Program Reaching More Californians and Supporting the Most Vulnerable
In 2026, Gov. Newsom and the California Legislature increased the amount of state funds available for the Covered California State Subsidy Program, appropriating $300 million in Health Care Affordability Reserve Fund (HCARF), up from $190 million. As a result, Californians with incomes up to 200 percent of the federal poverty level in 2027 ($31,920 for an individual or $66,000 for a family of four) will be eligible for financial help to lower the cost of monthly premiums.
While the state subsidy program is not enough to fill the gap left by the expiration of enhanced federal subsidies, more than 500,000 Californians are projected to receive a state subsidy in 2027, about 30 percent of all enrollees. Additionally, nearly 200,000 can choose from two Silver-tier plans with a $0 premium.
“Investing in the health of our residents is good for people. It’s also good policy,” said Governor Newsom. “The federal government has decided that health care affordability is not a priority, so California is stepping up once again to help families most in need across our state.”
Covered California estimates the state subsidy program will open financial help to an additional 200,000 Californians who weren’t eligible in 2026 and prevent 90,000 people from dropping coverage in 2027.
“When people have access to health insurance, they face less risk of financial hardship due to a medical issue, they miss fewer days of work, and they’re able to contribute more to their families and communities,” said Altman. “We’re grateful for Gov. Newsom and the California Legislature for passing these critical investments to help more Californians get connected to the coverage they need.”
California’s Individual Market Changes for 2027
Despite ongoing federal rule changes that affect eligibility and affordability, Covered California maintains a strong marketplace, with 1,785,000 enrollees as of March 2026, and engages in active negotiations with health insurance companies to help keep Covered California one of the most affordable options for health insurance.
This has helped ensure that California’s rate increase of 9.9 percent is significantly lower than the preliminary national median rate increase of 14 percent. It’s also why for most of the past decade, the average cost for a benchmark plan in California has been lower than the national average.
