Thousands of Californians will see their health insurance premiums climb by 8 percent in 2025, Covered California announced this week.
While still posing a significant financial hurdle to many Californians, that’s still lower than the 10 percent uptick residents saw this year, the largest increase since 2018.
Covered California Executive Director Jessica Altman told Cal Matters that the increase is because of increasing pharmacy costs and labor shortages across the industry. The health care industry has also seen wage growth, which also pushes up premiums.
“Paying more for any type of insurance has sadly become routine over the last few years, and the projected 8 percent jump in health care insurance next year for Californians doesn’t deviate from that new normal,” Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, told Newsweek.
Chris Fong, a Medicare specialist and CEO of Smile Insurance Group, said patients’ higher medical service utilization as well as the loss of more than 100,000 nurses during the COVID-19 pandemic contributed to the rise in premiums, and it’s a problem experienced across the country.
“I see this impacting nearly every corner of the United States,” Fong told Newsweek. “For California residents, the state of California provides additional subsidies for people who qualify to help alleviate the impact. The people who don’t qualify for these subsidies will bear the brunt of the increase.”
The majority of those enrolled in Covered California will not see the premium increase take effect because they receive government aid. The government will likely increase its subsidies to match the rising premiums, preventing the enrollees from paying more.
But if you’re one of the 10 percent in California who do not get that help, you’ll feel the full effect of the price hike.
The exact amount will depend on where you live and which insurance you’re under, but Cal Matters reported that Monterey, San Benito and Santa Cruz counties will see the highest surges with an average of 15.7 percent.
Insurance-wise, Aetna CVS Health, as well as Anthem Blue Cross and Blue Shield, and Anthem Blue Cross, will see the largest upticks at 15.4, 12.7 and 8.4 percent, respectively.
The state has been working to reduce health care costs, with Governor Gavin Newsom approving $165 million to lower co-pays and deductibles.
The American Rescue Act and Inflation Reduction Act also capped health insurance premiums to 8.5 percent of someone’s income during the pandemic. Because of state aid, some Californians will pay a monthly premium of $20 or even $0 a month.
While some Californians will have to pay more, Beene said there’s a silver lining in that it’s lower than this year’s uptick.
“There is somewhat of a glimmer of hope from the 2025 projections in that the rate at which the insurance costs are going up is declining,” Beene said. “The average in recent years has been 10 percent, and the 8 percent projection does fall short of that amount, if not by much. It might not be solace for those having to pay more next year, but it does at least give credence to the idea that the substantial increases will lessen with time.”
Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
