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Administration seeks $110M boost for Covered California subsidies, expands eligibility to 200% FPL; lawmakers applaud but ask solvency questions
Summary
May Revision would increase Covered California subsidies to $300M to expand eligibility and reduce premiums for more enrollees in 2027; lawmakers and LAO asked how penalty revenues and loan repayments sustain the expansion.
Department of Finance and Covered California officials described a May Revision proposal to augment the state premium subsidy program by $110 million (bringing total ongoing funding to $300 million) and expand eligibility from 165% to 200% of the federal poverty level beginning in 2027. Covered California staff said the number of enrollees receiving state subsidies would grow from roughly 300,000 in plan year 2026 to over 500,000 in plan year 2027, with more than 200,000 newly eligible individuals.
Covered California director Katie Ravel told the committee that the number of enrollees paying $0 premiums on silver plans would remain flat while those in the 150%–165% FPL band would receive a more generous subsidy (roughly $10 per member per month), and the 165%–200% band becomes newly eligible for state help in 2027.
Budget analysts asked about fund sustainability; Department of Finance noted projected repayment streams to the Healthcare Affordability Reserve Fund over the next two years that would help cover a projected $60M gap between penalty revenues and higher proposed spending. LAO clarified penalty revenue levels and emphasized ongoing monitoring of the fund balance.
Lawmakers generally praised the expansion as timely given recent federal subsidy changes and the administration’s proposal to augment gender‑affirming care funding, and held the items open for further fiscal review.
