In 2027, significant changes are set to occur in Covered California policies, affecting around 120,000 immigrants who may lose insurance subsidies. Some individuals may also lose their eligibility to purchase affordable health insurance. As the enrollment period approaches, insurance brokers are advising immigrants to understand these policy changes as soon as possible.
Covered California is the official health insurance marketplace in California, providing federal subsidies to help individuals and small businesses purchase affordable health insurance, leading to the introduction of “zero premium” health insurance plans in recent years. Currently, nearly 2 million Californians purchase health insurance through Covered California.
Starting from January 1, 2027, some immigrants with legal residency status will no longer receive federal subsidies, potentially leading to an average monthly premium increase of around $650.
According to information from the Covered California website, beginning in 2027, only lawful permanent residents (green card holders), Cuban and Haitian entrants, and residents from countries under the Compact of Free Association (COFA) will continue to receive subsidies, with the specific subsidy amount depending on individual income.
Individuals holding certain visas or immigration statuses will lose subsidy eligibility. This includes work visas, student visas, pending or approved asylum applications, refugee status, U visas and T visas, Temporary Protected Status (TPS), as well as other humanitarian or temporary legal residency statuses that previously qualified for subsidies.
Alina Chen, a senior insurance and financial advisor at Square Insurance, explains: “We have many clients with work permits, and even individuals with asylum status approved but pending for a green card who may lose the premium subsidy. Of course, they can still purchase insurance, but without the subsidy, the premiums will increase significantly.”
Covered California estimates that this major change will impact approximately 120,000 insured individuals in California. “For this group, there isn’t a particular solution available,” says Chen. Some clients who require medical care must continue buying insurance, while others who don’t need medical attention are faced with a dilemma.
Additionally, the mandate in California requiring individuals to have health insurance or face a fine remains unchanged. According to the California Franchise Tax Board’s announcement on their website, individuals who do not purchase any health insurance throughout the year and do not apply for exemptions will face a fine of at least $950 when filing taxes.
Covered California has been sending notifications to insured individuals who may lose subsidy eligibility. Chen advises that those who have recently obtained green cards should promptly update their immigration status in the system to avoid being automatically renewed with outdated information, resulting in premiums calculated without subsidies from January 2027 onwards.
She points out that many insured individuals have set up automatic bank account deductions. If data is not updated in time or if subsidy eligibility is no longer met from next year but the system continues the renewal, what used to be a monthly premium of just a few tens of dollars could suddenly increase to hundreds of dollars and be directly deducted from the bank account.
Chen suggests contacting an advisor before December 15 to confirm subsidy eligibility and premiums, and to update data or cancel insurance early. Due to the busy holiday season, system processing may be delayed, so it’s advisable not to wait until the last minute. Furthermore, any changes in information such as address and phone number should be updated immediately to avoid missing important notifications.
Following past practices, the renewal period for existing Covered California policyholders runs from October 15 to December 31. New customers must wait until November 1 to apply for the 2027 health insurance plan, with the enrollment period ending on January 31 next year. Missing the deadline will result in losing eligibility to purchase the 2027 plan, with some exceptions.
The California health insurance plans are categorized into bronze, silver, gold, and platinum levels, with higher levels having higher monthly premiums. Each year, the out-of-pocket costs and monthly premiums for different plans may be adjusted slightly.
For immigrants who still qualify for federal subsidies, the subsidy amount is dependent on family annual income and other conditions. Chen reminds applicants to truthfully report their projected annual income during application. Underreporting income may lead to receiving subsidies exceeding the actual amount eligible, requiring repayment of the excess subsidies at the end of the year.