Healthcare costs continue to rise, although masked by subsidies

KFF Health News published an article about how the new White House administration may allow current insurance premium subsidies to expire and the effect that decision might have on those who buy insurance from California's health insurance marketplace. According to some researchers, "Covered California premiums for subsidized enrollees would soar by an average of $967 a year beginning in 2026, and an estimated 69,000 Californians would lose their insurance." Tragic as that might seem, the underlying issue appears to be the cost of healthcare, which in turn, drives up premiums. For context, "California took its own steps last year to make coverage more affordable, eliminating deductibles and reducing other out-of-pocket costs on all mid-tier policies."

The article explains, "While federal and state subsidies have significantly boosted the amount of assistance available, the underlying cost of insurance has continued to go up. Covered California premiums are up by 7.9% on average for 2025, but the extra subsidies shield most enrollees from the increase." So the government subsidies certainly help individuals in the short term, but do not do anything to slow the growth of healthcare costs in the whole system.