With health insurance open enrollment kicking off Saturday, Tara and Todd Nicklous were stunned to discover that their health insurance premium purchased through the Affordable Care Act will skyrocket from $923 to a jaw-dropping $3,264 per month next year.

“My gut sunk,” Tara Nicklous, 56, said.

The couple, who run a real estate appraisal business, had qualified for coverage after former President Joe Biden expanded Affordable Care Act tax credits during the COVID-19 pandemic in 2021 and for the next four years. Those credits, set to expire at the end of the year, are now at the heart of the ongoing federal government shutdown. Democrats won’t vote to reopen the federal government unless Republicans extend the credits, and Republicans refuse to negotiate until the government reopens.

Paying for health insurance is about to get a lot harder. Tara relies on expensive treatments for a blood cancer she’s battled for more than a decade. Thankfully, she said, the couple squirreled away savings to pay for their premium next year — but not without some belt-tightening.

“We’re hunkering down,” Tara Nicklous said.

Tara Nicklous shows the newly updated premium coverage available through Covered California at her home in Castro Valley, Calif., on Friday, Oct. 31, 2025. Tara, a cancer patient and Obamacare client, will see her health care premiums triple starting Jan. 1, she said. (Ray Chavez/Bay Area News Group) 

Figures released by Covered California, the state’s marketplace for the Affordable Care Act, also known as Obamacare, project a grim reality for most of the 2 million Californians who use the exchange to buy federally subsidized health insurance. When 2025 ends, those insurance premiums will double in cost, on average.

Many residents will see premiums triple in cost, including middle-income Californians who have benefited from the expanded ACA tax credits.

Democrats say the health tax credits are critical for patients and cite estimates that they’ve helped double enrollment in the Affordable Care Act nationally. Republicans have said they’re a boondoggle that has benefited immigrants without legal status, who are ineligible for the federally funded coverage.

When Covered California enrollees in the Bay Area notice the new pricing, “their eyes are going to pop out of their heads,” said Larry Levitt, an Oakland-based policy executive at the health policy group KFF.

Among those hardest hit will be people in their 50s and 60s who haven’t reached the age to qualify for Medicare, Covered California said.

The Nicklouses purchase their Kaiser Permanente coverage through the Covered California marketplace. This summer, Tara Nicklous said her Stanford Medicine hospital billed Kaiser more than $5 million for T-cell therapy. That leaves the couple with no choice but to pay their new premium, she said.

Plenty of other Californians won’t be able to pay the higher premiums. About 400,000 people in the state are expected to lose their Covered California eligibility because of the policy change, according to a report by the Urban Institute think tank. Of those, 175,000 are likely to be priced out of insurance coverage entirely, the report estimated.

Rep. Eric Swalwell, an East Bay Democrat who represents Castro Valley, blamed Republicans for the price spikes.

“For weeks, Democrats have been warning that leaving health care out of this funding bill would raise costs for millions of Americans,” he said in a text. “Now, those consequences are becoming reality.”

If the federal tax credits do expire as planned, California officials will provide some limited assistance. The state is planning to provide about $200 million in state tax credits to low-income residents who earn slightly too much to qualify for Medi-Cal — about $25,800 per year for a single person, Covered California said. Medi-Cal is the state’s version of Medicaid, the public health insurer for low-income people.

Covered California started notifying enrollees of the cost spikes ahead of the open enrollment period from Nov. 1 through Jan. 31.

On top of the expiring tax credit, health insurers in California are raising 2026 premiums for Covered California enrollees by 10% on average as the costs of delivering care rise — and more patients turn to expensive weight-loss drugs like Ozempic, Levitt said.

Insurers are also raising rates in anticipation of the expiring tax credit, according to the health policy analyst. That’s because healthier people may drop their insurance as costs rise; those that remain in the insurance pool are sicker and more expensive to care for, Levitt said.

Kaiser Permanente, the state’s biggest private insurer, will raise rates 7.1%, for Covered California plans, the marketplace said. In an email, a spokesperson said the increase is “lower than the increases seen by most competitors in California markets,” but did not elaborate.

Rising coverage costs and loss of insurance make patients less healthy, said John Murphy, chief medical officer at La Clínica de La Raza. The network of community health centers serves 83,000 patients at nearly three dozen locations in Alameda, Contra Costa and Solano counties.

Patients put off preventative care when it’s too expensive, Murphy said. Eventually, they’ll land in a hospital emergency room.

Anthem Blue Cross, another major insurer, is raising rates 14.5%, for Covered California plans. Spokeperson Michael Bowman said that’s in part because Obamacare enrollees already are relying on emergency rooms for care at twice the rate of patients with employee-sponsored health plans, he said.

Like others in California’s healthcare, Murphy said the expiring tax credit is only one prong of Republican President Donald Trump’s moves to shift spending on healthcare from the federal government to states like California.

About 3.5 million Californians are expected to lose Medi-Cal coverage under changes in the president’s “Big Beautiful Bill,” according to the California Budget and Policy Center. The administration says it will preserve benefits for those who truly need them.

For the Nicklouses, it’s going to mean some difficult adjustments in the near future, and even more so if things don’t change.

“We’re changing our shopping and our eating habits,” Tara Nicklous said. “I’ve never been such a Walmart and Costco shopper. Vacations? Forget it. Maybe camping.”

Bay Area News Group staff reporters Rick Hurd and Caelyn Pender contributed to this story.