The Brief

California this week plans to notify Affordable Care Act marketplace enrollees that their costs could rise sharply next year unless Congress extends subsidies to help people buy health insurance.

Health care analysts say the nation’s uninsured population will rise significantly if federal lawmakers do not agree to renew covid-era tax credits, which Congress authorized in 2021 to supplement ACA subsidies.

They’re popular too. According to a KFF poll, more than three-quarters of adults, including 59% of Republicans, say they want Congress to extend the enhanced tax credits for people with low and moderate incomes. KFF is a health information nonprofit that includes KFF Health News, the publisher of California Healthline.

The additional credits have lowered premiums, helped millions of Americans afford the cost of ACA insurance, and lowered the nation’s uninsured rate.

Last week, President Donald Trump suggested a health care deal might be in the works. And Republican U.S. Rep. Marjorie Taylor Greene of Georgia, long aligned with the “Make America Great Again” movement, appeared to endorse an extension of the tax credits, saying in a social media post that she was “absolutely disgusted that health insurance premiums will DOUBLE if the tax credits expire this year.”

However, Republican leaders want to reopen the government first, while Democrats want a deal in a bill that ends the shutdown.

If the supplemental subsidies are not extended beyond this year, the amount subsidized consumers pay for their ACA health plans is expected to more than double on average. That would be a painful cost-of-living increase for most of the country’s more than 24 million marketplace enrollees, including almost 90% of the nearly 2 million people in Covered California, the largest state-run health insurance marketplace. Analysts say the loss of enhanced credits would lead millions to drop their coverage nationally, including hundreds of thousands in California.

The federal government shutdown stems primarily from a disagreement between Democratic lawmakers, who want to extend the tax credits, and Republicans opposed to the cost and, in many cases, to the landmark health care law itself. One estimate puts the price tag at $350 billion over 10 years. The Democrats hope their stance can help them win back the House in next year’s midterm elections, as they did in 2018 following a failed GOP effort to repeal the ACA.

Open enrollment season for 2026 ACA health plans starts Nov. 1 in most states, including California, and enrollees still have no clue whether their premiums will rise exorbitantly next year.

“People need to be able to shop for health plans,” says Jessica Altman, executive director of Covered California. “We are at a pivotal moment.”

In July, Covered California sent notices to enrollees breaking out the enhanced portion of their federal subsidy that is set to expire. The idea was to give them a warning of how much their costs might rise if they chose to keep the same health plan next year.

In one case, a common scenario for middle-income enrollees, the entire subsidy of $200 a month would go away. Another enrollee stood to lose one-third of a total $600 per month in aid, according to sample notices provided by Covered California.

The additional tax credits have provided financial assistance to many middle-income health plan shoppers who didn’t qualify for the original subsidies and increased the amount of aid for many others.

Senate Majority Leader John Thune in late September left the door open to extending the otherwise-expiring tax credits but said “it would have to come with some reforms.”

Those might include changes that would reduce the number of enrollees eligible for the extra financial aid, based on income, and reduce or eliminate zero-premium plans, which have become widely available with the advent of the additional tax credits.

If the enhanced subsidies end, Covered California projects its enrollees receiving enhanced subsidies will see their premium costs rise an average of 97%. But the increases will not be borne equally. Depending on age, income, and location, some people will see smaller jumps while others could see their out-of-pocket costs triple, Altman says.

Rural residents, especially in the northern and eastern counties, and along the Monterey Coast, will see disproportionately large cost increases, according to projections from Covered California. Enrollees with incomes over $62,600 will lose financial aid altogether, leaving some who are ages 55-64 with premium bills as high as 30% of their income.

Without the enhanced subsidies, “we’re going to see more people experiencing medical debt, more people being either uninsured or underinsured,” says Cary Sanders, senior policy director at the nonprofit California Pan-Ethnic Health Network. “And that is the quickest way for families to lose their economic security.”

Covered California estimates about 400,000 people would leave the exchange and likely go without insurance. And that, health care professionals and advocates warn, will only heap stress — in the form of more crowded emergency rooms and community clinics — on an already stressed health care system.

But the proportional impact in California will be smaller than in some Republican-led states such as Florida, Texas, and Georgia. Since those states did not embrace the ACA’s Medicaid expansion, millions of residents thronged to Obamacare marketplace plans, particularly after the enhanced tax credits made coverage eminently more affordable.

From 2020 to 2025, ACA marketplace enrollment grew nearly 2.5 times in Florida to 4.7 million — more than double California’s marketplace enrollment. In Texas, it more than tripled to just under 4 million. Georgia’s tripled, too, to 1.5 million.

California has about $190 million for 2026 in state funds to help offset the loss of the enhanced premium subsidies. But that money is currently used to help offset enrollee deductibles, coinsurance payments, and other out-of-pocket expenses. And it’s a drop in the bucket compared with the $2.5 billion annually in financial aid Covered California enrollees currently receive from the expiring tax credits.

“A lot of people are going to be shocked at what they’re facing,” says Rachel Linn Gish, a spokesperson for the nonprofit advocacy group Health Access California. “They’re going to have to make super hard choices of, ‘Do I cut back on my groceries, or my rent, or do I go uninsured?’”

Very soon, Covered California and other ACA marketplaces will have to send out formal open enrollment letters, notifying enrollees precisely what to expect for 2026 coverage.

Covered California typically sends those letters out Oct. 1 but has delayed them to around Oct. 15 in the hope that Washington will provide clarity. For now, Covered California has two versions of the letter on ice, one with tax credit extensions and one without.

Altman says she is hoping for congressional action before sending the one with whopping premium increases. But she may have no choice.

“That’s the default here, as in the thing that will happen if nothing changes,” Altman says. “It is also the worst-case scenario, unfortunately.”

She fears that if Covered California informs enrollees that their rates will likely rise sharply, it will scare many away, even if Congress later agrees to extend the credits.

A years-long effort to bring fast, reliable internet to Catalina Island cleared a major vote today after the California Public Utility Commission awarded $37 million to install subsea fiber internet infrastructure between Orange County and the island.

More than 4,000 residents on Catalina Island don’t have reliable internet. That’s because the rural island doesn’t have fiber broadband infrastructure, and large communication companies don’t serve the area because of high costs.

“We currently operate off of a microwave tower, and it’s time that Avalon had nothing better than the rest of the mainland, but the same,” Avalon City Councilmember Lisa Lavelle said during public comment.

Lance Ware, CEO of AVX Networks, the telecom company tasked with building Catalina Island’s broadband infrastructure, said this project is significant to the quality of life for island residents.

“No one thought Catalina really was worthy,” Ware told LAist. “It really took a long time to convince the grant makers that this is a very much underserved community … not only digitally red lined, but forgotten about from an infrastructure perspective, and I mean that beyond communications.”

The impact to the community is almost immeasurable, he added.

“The access to that technology, workforce development, economic development and just the potential outcomes change massively for everybody involved,” Ware said. “Our ability to deliver world-class health care and public safety is huge.”

What we know about the project

The commission distributed more than $96 million in federal grant funds during Thursday’s meeting to five groups for high-speed broadband projects, including AVX Networks.

The planned proposal includes building a fiber-optic network above and underground from Catalina Island to the Orange County coast.

When it comes to internet connection, the entire island is unserved, according to the commission’s agenda report. That means it has zero access to broadband internet.

According to records, the undersea cables will run under the San Pedro Channel from two points on the island to landings near Huntington Beach. Those cables will then connect to the Middle Mile Broadband Network in Stanton.

The grant will cover 100% of the project costs, records show.

What’s next?

Grantees are required to follow a set of rules to receive funds, and that includes committing to providing internet service at affordable rates.

Ware said AVX Networks will have a low-income plan at $40 a month at 100/100 Mbps — this is the download and upload speed of the service.

“We chose to go symmetrical, which means the upload is the same as the download,” Ware added. “For people doing video streaming or telemedicine or FaceTime, even, or e-learning, it's really important to have symmetrical bandwidth.”

AVX Networks also has committed to maintaining those rates for at least 10 years, the commission agenda reported.

Next, the company needs to get permits for building out the project and surveying a route on the sea floor for the cables.

The city of Anaheim spent around $17 million on credit card purchases from places like Target, Walmart and Amazon over the past two years, recently obtained records show, but the system hasn't been audited since 2018.

Anaheim spokesperson Mike Lyster, who along with city leadership did not answer detailed questions about the purchases, confirmed the lack of audit.

The absence of audits was a central issue former purchasing agent Kari Bouffard included in a tort claim in June alleging she was fired for raising concerns that the city’s top finance official, Debbie Moreno, was enabling fraud, wasting millions of taxpayer dollars and lying to the City Council.

In the legal claim, Bouffard says when she raised concerns over the lack of an audit with the city’s audit team, which then wanted to audit the credit card program, she alleges Moreno told her: “Do not let them in the door.”

“I found her response unprofessional, dismissive, and deeply concerning, particularly given her role as Finance Director and her responsibility to support accountability and internal controls,” Bouffard wrote.

In October, Lyster confirmed an external legal team is conducting “an independent outside review” of the allegations in the tort claim. But he did not answer questions about who the firm is or how much that contract has cost the city.

LAist requested and reviewed credit card monthly billing statements for all city-issued credit cards for the past two years. The statements show city employees spent tens of thousands of public money at places like Target, Walmart and Amazon on “food, office and other operational supplies for city business purposes,” according to Lyster. The statements do not show details about specific purchases.

The Amazon purchases totaled around $1.7 million of public money over the two years, according to the data. Anaheim provided a breakdown of the Amazon purchases that did not include details about what was bought at the online marketplace.

Lyster said Anaheim monitors credit card purchases appropriately.

He confirmed credit card purchases were last audited in 2018 by the city’s Internal Audit team.

“There was no larger concern with any of the findings, and we reject any mischaracterization and misinformation about oversight of the city’s purchasing cards,” Lyster said in a statement.

Lyster told LAist the city’s purchasing agent, who until recently was Bouffard, can “pursue audits at any time,” but one has not been done recently. In the tort claim, Bouffard said she raised concerns with Moreno over “lack of time and staffing within the Purchasing Division to adequately manage and audit the program.” Moreno’s solution, she said, was a temporary staffer — “an insufficient solution given the scope of responsibilities,” Bouffard wrote.

Lyster also said the financial firm KPMG conducts an annual audit of a sample of credit card transactions. LAist asked Lyster for a copy of the KPMG sample audit, but he did not share it.

Anaheim’s credit card spending amounts to about $800,000 a month.

The city of Irvine, also one of OC’s most populous cities, spends around $500,000 on credit cards every month, according to city spokesperson Kristina Perrigoue. Those purchases are audited monthly, Perrigoue said. Irvine’s purchasing staff randomly selects one department per month to audit and they audit a sample of purchases.

“We take the five users with the highest number of transactions and audit all their transactions for the prior month,” Perrigoue said.

Why it matters

Earlier this year, Anaheim grappled with how to close a $60 million budget shortfall after spending more than they were generating in revenue. City leaders closed the deficit with proceeds from capital bonds and by pulling money previously set aside to repay debt. The City Council recently declined to put a gate tax at its entertainment venues, including Disneyland, to voters. Instead, the majority of the council decided to meet at a future date to discuss revenue generating ideas. At that meeting, Mayor Ashleigh Aitken called for “tightening our belts” to boost revenue.

LAist review of the credit card purchases showed significant spending at vendors — some with which Anaheim has cooperative agreements with.

Cooperative agreements allow agencies like the city of Anaheim to pre-negotiate pricing so they get the best deals.

Anaheim’s credit card policy states that the credit card can only be used for the small dollar purchase of supplies or off-site services. Typically, for bigger purchases, cities turn to cooperative agreements.

“The vast majority of city purchasing — most purchases more than $10,000 — is done by purchase order or contract,” Lyster told LAist.

Credit cards, Lyster said, “provide an efficient, cost-effective way of making smaller purchases, rather than use of petty cash, direct payments, cash advances and check requests, which can be more cumbersome, administratively costly and bring their own risks of misuse.”

“There are cases where a purchase order or contract would be unnecessary and excessive, adding time and cost and impacting timely service to our community,” he continued.

LAist has shared our findings with Aitken, City Manager Jim Vanderpool and all council members. We have also reached out to Moreno for an interview. We will update this story if we hear back.

Here are some of our key findings from Anaheim’s credit card purchases:

• Over $800,000 spent on restaurants

City employees spent more than $800,000 on restaurants in Southern California and elsewhere over two years including around $60,000 at K&A Restaurant and over $20,000 on In-N-Out. Some restaurants from the credit card statement include Aloha Steakhouse in Ventura County, Tacos 1986 in Pasadena and BaBaLoo Lounge in Palm Desert.

Lyster told LAist the restaurant spends “are catering expenses for events or meals for special work operations.”

He said the city also provides meals when they “bring together a large contingent of our own police officers and those of other agencies to work demonstrations, high-profile dignitary visits or other occasions,” especially for work in the evening or on weekends.

Lyster added that the council meetings are also catered and the city hosts community events where they cater food for the public.

• Around $650,000 spent on hotels

LAist’s review of the credit card purchases showed thousands of dollars spent at hotels, including the Grand Hyatt in Nashville, Caesars Palace in Las Vegas and a pet hotel in Oxnard.

“The vast majority of this spending is for employee development to ensure our people are continually learning and aware of best professional standards,” Lyster said about the hotel charges. “This is an investment in our workforce that brings better service to our community.”

• Around $40,000 spent at Costco, close to $120,000 at Sam’s Club, around $120,000 at Target and around $57,000 on Walmart purchases in two years

Lyster attributed this spend to “food and supplies.”

The Community Services Department, he said, buys “food and crafts and other supplies” for the city’s Fun on Wheels program, the Mobile Library and family resource centers.

He declined to answer questions on whether employees submit a request for the purchase of goods and services and how the city tracks if these purchases are used for public benefit. The requests, called requisitions, are typical first steps in the purchasing process detailing quantity, description and use, Bouffard told LAist. When she worked at the county, all purchases went through this “checks and balances process,” she said.

• Over $600,000 spent at Home Depot, more than $550,000 at Office Depot and over $340,000 at Grainger

Lyster didn’t confirm if the purchases at these vendors were made using a purchase order.

He confirmed Anaheim has accounts with Grainger, Office Depot and others, but not if the city’s credit card purchases at the vendors are made through the dedicated account.

LAist correspondent Jordan Rynning contributed to this report.