California is getting ready to increase a health insurance tax. Will it affect your premium?

June 18, 2026 - 19:07

California is preparing to raise a tax on health insurance plans, and private insurers say the extra cost will likely be passed directly to consumers. The proposed increase is meant to generate billions of dollars to help fund Medi-Cal, the state's health insurance program for low-income residents. But for families who buy their own coverage, the price tag could be steep.

Industry estimates suggest that if the tax goes through, a typical family could see their annual premiums rise by roughly $400. The tax is levied on health plans based on the number of members they cover. Insurers argue they have no choice but to adjust premiums to cover the new expense. Consumer advocates worry the added burden will push coverage out of reach for some middle-class households.

State officials say the revenue is necessary to stabilize Medi-Cal, which covers about 15 million people. Without the increase, they warn, the program could face cuts or reduced services. The tax is part of a broader effort to maintain coverage gains made during the pandemic.

The proposal still needs final approval from lawmakers. If passed, the higher premiums could take effect as early as next year. For now, families with private plans are left wondering how much more they'll have to pay - and whether the trade-off is worth it.