IE's Covered California pool faces a 12.5% rate hike — steeper than the state — on 186,850 enrollees

Covered California covers Riverside and San Bernardino counties as Region 17. Its preliminary 2026 filing puts the region's average premium increase at 12.5%, above the statewide 10.3% and the third-steepest of the state's 19 rating regions. Those rates are still subject to final review by the Department of Managed Health Care, but the direction is set.

The rate increase is only half the cost shock. The federal enhanced premium tax credits that lowered marketplace premiums since 2021 expired Dec. 31, with no congressional extension. Covered California estimates that from the subsidy loss alone, 1.7 million California enrollees could see net premiums rise an average of 66%.

Who absorbs that in the IE matters for operators. The marketplace pool is the region's self-employed, gig workers, early retirees, and employees of small firms that don't offer group coverage — the people Covered California's own director describes as the core of the exchange. They are the IE's contractors, owner-operators, and small-business workforce, and their household health costs are about to climb.

Statewide, the early data shows the squeeze. New enrollment fell 32% for 2026. Among middle-income renewing enrollees who lost all subsidy help, the cancellation rate hit 22%, double the prior year. More than one in three new enrollees dropped to a Bronze plan, trading lower premiums for higher deductibles — a shift that pushes more first-dollar medical cost onto the household.

For IE employers, the read is twofold. Workers without group coverage face a real 2026 cost increase, which feeds wage and retention pressure in a labor market already tight on logistics and service workers. And the small firms that don't offer health benefits become marginally less attractive against those that do, just as the cost of offering coverage rises across the board.