Health Insurance & Affordability: Questions Everyone is Asking

Premiums are up for many, and a lot of Californians are trying to figure out what changed and what to do next. Whether you are a young adult paying for coverage for the first time, a low-income family counting on financial help, or an early retiree trying to make the math work, it can feel like the rules keep changing.

This article breaks down the questions people are asking, like why premiums change, how financial help works, what “falling off the cliff” means, and how to avoid common network and billing headaches.

Rising Health Insurance Costs

Why did my premium increase?

First, a higher premium doesn’t mean you are stuck. You may have options for staying covered that better fit your budget. Let’s break down the most common reasons your monthly premium changed.

A big one is that some people no longer get the same level of federal savings that were put in place during the COVID pandemic. This temporary savings lowered monthly premiums for many. At the same time, inflation and rising health care costs, like prescription drugs and medical services, keep pushing costs higher.

Your personal situation also matters. Monthly premiums often go up as you get older, and if your income increases, your financial help may decrease, which can raise what you pay out-of-pocket each month.

Check your income and household information (that’s you and any dependents), then compare what health plan options you qualify for. Even a small update, or a different plan choice, can make a real difference in what you pay.

Why do monthly premiums vary?

Everyone’s situation is different, and health plan pricing factors in a few different variables.

The biggest one is income and financial help. If your income changed, the amount of financial help you get to lower your monthly premium can also change. Family size also matters.

Then you have the other factors: age, where you live, and what health plan you are on. Even if you did not change anything, insurers can raise rates, and those increases do not hit every plan the same way.

Health Insurance Affordability

Why does health insurance feel unaffordable?

Health insurance costs and premiums keep rising, often faster than wages, especially for those with limited financial resources. When paychecks do not keep up, health insurance costs feel impossible. With housing, food, and bills, budgets are often already stretched.

Even when you have coverage, unexpected costs can hit hard. Deductibles, copays, and services not fully covered can add up fast.

However, you do have options. Make sure to shop your health insurance each year and compare your options every open enrollment. If you have a major life change mid-year, certain events can unlock special enrollment, so you can update your health plan sooner.

Why do young adults pay so much?

We understand figuring out health insurance can be overwhelming. Free help is available year-round online, in person, or over the phone.

While young adults generally have the lowest premiums because rates are age-based, it can still feel like a huge hit to a tight budget—especially if you're transitioning off a parent's plan or starting your first job. When you're healthy, paying a monthly premium for something you rarely use can feel like you’re 'paying too much.'

The real difference comes down to how much you pay each month versus how much you pay when you use care. A lower monthly payment means higher out-of-pocket costs, or vice versa.

When you enroll through Covered California, the same benefits are covered by all plans, which may provide you peace of mind.

Bronze, Silver, Gold, and Platinum are Covered California’s four coverage levels. Bronze plans cover 60 percent of your health care costs, Silver covers 70 percent, Gold covers 80 percent, and Platinum covers 90 percent. However, if your income is in a certain range, you may qualify for extra financial help through a Silver plan. If you are under 30, you have even more options, including Minimum Coverage plans that offer a lower monthly premium to protect you from high costs in case of a serious injury or illness. Look here to learn more about health plans.

Keep in mind, unexpected medical expenses can be financially devastating without coverage.

Why do young adults struggle with health insurance costs?

Whether you are just starting your career or still in school, tight budgets plus other living expenses like rent and student loan payments can make health insurance feel like just one more bill you don’t need.

Plus, maybe you’re healthy and probably feel like you don’t need health insurance. You may feel that it’s hard to justify spending money on something you will rarely use. And if you’ve never paid for your own health insurance before, there’s probably some sticker shock, even with financial help.

But unplanned medical bills can really set you back. For example, fixing a broken leg without insurance coverage can cost $7,500 out of pocket. Read on to learn more about the benefits of staying covered — and why health insurance might be more important than you think.

Why am I struggling to pay for health insurance even with financial help?

Even with financial help, coverage can still feel out of reach for a lot of families.

Financial help can lower your monthly premium, but deductibles, copays, and other costs can add up fast, especially if anyone needs regular care.

Tight budgets leave very little wiggle room. When most of your money is going to the basics like housing, food, and utilities, a monthly premium can pinch.

And covering more than one person costs more.

Check your income and household information. Even a small update, or a different plan choice, can make a real difference in what you pay. Free advice is available year-round online, in person, or over the phone. Covered California is here to help.

How does financial help work?

Covered California offers financial help, also called a subsidy or Advanced Premium Tax Credit, to lower the cost of your monthly premium and in some cases, the cost of your health care when you use your health plan. How much help you get depends on your household income and size, ages, and the cost of plans in your area.

Four out of five people who enroll through Covered California get financial help.

It’s easy to check what you qualify for. You can use our Shop and Compare tool. Here’s the information you’ll need:

• Total household income

• Zip code

• Household size and number of people who need coverage

• Age of people who need coverage

From there, you compare plans and see what fits your needs and budget.

One thing to remember: if your income changes, your financial help can change, too. If your income goes up or down during the year, keep an eye on it and report updates as they happen. Things like bonuses and investment gains can affect your amount of help. So can 401(k) and IRA contributions.

Retirement Planning and Health Coverage

How do I plan for health care during early retirement?

If you plan to retire before 65, you will need coverage to bridge the gap until you qualify for Medicare. The goal is simple: stay covered, keep costs predictable, and avoid surprises.

Your main options are Covered California, COBRA, your spouse or partner’s plan, or buying a private plan. If your income drops after leaving the workforce, you may qualify for financial help through Covered California or Medi-Cal, which can make coverage more affordable. COBRA lets you keep your employer plan for a limited time, but it can be expensive since you pay the full cost. If your spouse or partner has job-based coverage, joining their plan can be a solid option. Buying a plan directly from an insurance company is also possible.

Covered California may be your most affordable option, and it is easy to check what financial help you might qualify for using our Shop and Compare tool. Before you choose, run the numbers!

Don’t just look at the monthly premium. Estimate your total yearly costs, including deductibles, copays, prescriptions, and your max out-of-pocket. Also pay attention to taxable income, because where you pull money from, and when, can change what you pay for coverage.

If you can, setting up a Health Savings Account (HSA) before you retire can be a big plus. It lets you save money tax-free that you can use toward medical expenses.

Why does Covered California not feel affordable for early retirees?

Even though Covered California can be a great option, some early retirees feel it is expensive.

Monthly premiums can be more for middle- or higher-income retirees because the financial help you get is less.

Monthly premiums are only part of the cost. Deductibles, copays, and coinsurance can add up fast, especially if you need regular care or prescriptions.

Plus, health insurance costs keep climbing, and monthly premiums tend to rise along with them, even when you still qualify for financial help.

Conclusion

If your costs jumped, take a minute to review your income info, your financial help, and your health plan choices. You have options. A small update or a different plan can make a big difference.

You are not alone in this; Covered California can help. With more than 10,000 centers across the state, we understand figuring this all out can be a lot. Free help is available year-round online, in person, or even over the phone.