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Californians will pay almost 10% higher healthcare premiums on average for their Covered California coverage in 2027, the state agency announced Tuesday.
In the coverage year 2027, premiums will increase by 9.9%, compared to the 10.3% increase for 2026.
In a news release, Covered California said that the increase in premiums is driven by the rising cost of healthcare and pharmacy expenditures, and the federal government’s slashing of healthcare funding.
In 2025, the Republican-controlled Congress did not extend Affordable Care Act tax credits that helped subsidize healthcare for millions of Americans. Then, in 2026, President Donald Trump’s administration restricted some immigrants from accessing Medicaid — the health insurance program for low-income individuals and families known as Medi-Cal in California — by changing the eligibility criteria.
“The fallout from these federal actions,” said Covered California executive director Jessica Altman in the news release, “continues to reduce affordability and put health insurance out of reach for too many — something our state is fortunately counteracting.”
With federal subsidies being cut, California is using state funds to keep healthcare coverage costs low for enrollees.
This year, Gov. Gavin Newsom and the state Legislature appropriated an additional $110 million for Covered California. The money will be used to subsidize healthcare premiums for around 500,000 Californians in 2027.
“The federal government has decided that health care affordability is not a priority,” Newsom said in the news release, “so California is stepping up once again to help families most in need across our state.”
Also on Tuesday, the U.S. Department of Health and Human Services announced that it will be deferring almost $900 million in Medicaid payments to California.
The agency has asked the state to submit additional documentation to support Medicaid claims identified by the HHS as high-risk in an effort to “combat fraud, waste, and abuse in Medicaid and safeguard federal taxpayer dollars.”
“Medicaid exists to serve vulnerable Americans — not to bankroll unsupported claims,” said HHS Secretary Robert F. Kennedy Jr. in a news release. “States that receive federal Medicaid funding must demonstrate that every dollar meets federal requirements. When they cannot, we will not release federal funds until they do.”
