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Giving additional detail to an earlier story about expected rises in health insurance premiums, NPR wrote about two people who expect to pay much more for their health insurance next year. One 63 year-old woman currently pays $479 per month, and an online calculator estimated that she should expect to pay around $2,800 a month next year. Similarly, the second person detailed in the article currently pays about $300 a month and is concerned that his costs could rise to $1,000 or more -- high enough that he is considering changing jobs to a larger company that offers more benefits.

Theoretically, Congress could avert these scenarios by extending subsidies, but the current Congress is not expected to do so. While subsidies make the insurance plans more affordable, they seem to do little to address the underlying cost issues. However, addressing those cost issues in a meaningful and sustainable manner likely will take years to start to have a significant effect.

Health insurance premium subsidies are currently expected to be reduced, and premiums themselves are expected to rise faster than usual because of the reduced subsidies. KFF Health News wrote about the financial impact that many will experience because of the reduced subsidies. If Congress does not intervene, people who earn four times or more of the federal poverty level will lose subsidies entirely because the previously suspended "subsidy cliff" will become policy once again. As an example, the article estimated that one couple that currently pays about $600 in monthly premiums will need to pay about $1,800 per month because their income exceeds the threshold for subsidies. However, even people whose income does not exceed the threshold will still most likely experience a reduction in subsidies, with one hypothetical example seeing a rise in monthly out-of-pocket premiums from $2 to $72.

Having a system where the subsidies are phased out with higher income rather than a single threshold seems to be better public policy, since it should avoid giving some people incentives to avoid growing their income. Regardless, perhaps the more basic problem is the high cost of medical care.

KFF Health News published an article about the shortage of mental health providers in the state, noting that "California was short roughly a third of the 8,100 psychiatrists and 117,000 licensed therapists it needed." The article also reported that "While the state has opened more slots for training in recent years, it can cost as much as $250,000 a year and requires 12 years of postsecondary education."

Being short one-third of the needed staff seems like a very difficult challenge. Unfortunately, even if the state had money to throw at the problem, the training pipeline would make it difficult for the training programs to address the shortfall in the near-term. On top of that, the article reports that there is some question as to whether the federal government might reduce the $1.9 billion of Medicaid funds to "train, recruit, and retain behavioral health workers, enticing them with scholarships and loan repayments, and helping schools fund new residencies and fellowships." If some other states had excess mental health providers, California might be able to attract them with higher wages or allow more remote visits. Realistically, however, the shortfall has taken years to develop and will likely require years to resolve.

Public policy can be difficult to get right, and incentives can have unintended consequences. KFF Health News published a piece describing the challenges that a "benefit cliff" caused. Medicaid provides health insurance for low-income individuals. Understandably, there is an income threshold, above which individuals are no longer eligible. In practice, however, this means that individuals who are earning just under the threshold could perversely end up worse off if they receive enough income to exceed the eligibility threshold, but not enough to cover insurance premiums. The person profiled in the article decided to under-report his income, noting "I don't want to be a fraud. I don't want to die ... Those shouldn't be the only two options."

A better way of handling income eligibility would be to price the Medicaid insurance premium, and then cover it completely for individuals whose income is below a certain threshold. Then, as people's incomes rise, the subsidy is decreased, but the individual is always better off when making a higher income. At some income level, the subsidy would disappear entirely.

Insurance premiums have been rising for decades now, but the rise for next year is expected to be higher than usual. KFF Health News reports that "insurers nationally are seeking a median rate increase ... of 15% ... That's up sharply from the last few years. For the 2025 plan year, for example, KFF found that the median proposed increase was 7%." Exacerbating the situation is that federal subsidies for premiums are slated to expire at the end of this year. While Congress might extend the subsidies, if they do not, "policy experts estimate, the average amount people pay for coverage could rise by an average of more than 75%."

One complicating factor seems to be that at least some insurers are "tacking on extra percentage point increases in their 2026 rate proposals to cover effects of policy changes." The logic appears to be that if premiums are too expensive, then the healthy are more likely to drop coverage, leaving those who need more medical care. To compensate, insurers might need to raise premiums even more the subsequent year, perhaps leading to more healthy people dropping out of the insurance pool. If this cycle repeats, it can lead to what is known as an "insurance death spiral."