In 2010, California was the first state to enact legislation to implement the Federal Affordable Care Act (ACA). By doing so, the state created a health insurance marketplace called Covered California. This allows for uninsured individuals to buy medical coverage as required by law. Business owners can also help buy coverage for their workers. It’s important to read through all of your options and to sign up during the open enrollment period.
Covered California has 10 insurance companies offering plans, as of May 2015. These include:
- Anthem Blue Cross of California
- Blue Shield of California
- Chinese Community Health Plan
- Health Net
- Kaiser Permanente
- L.A. Care Health Plan
- Molina Healthcare
- Sharp Health Plan
- Valley Health Plan
- Western Health Advantage
December 15, 2015 — deadline to enroll for coverage to begin on January 1, 2016
January 31, 2016 — open enrollment period closes
All plans must offer the following 10 essential services:
- doctor visits
- chronic disease management
- emergency care
- maternity care
- newborn care
- mental healthcare
- laboratory services
- pediatric care
- preventive care
- rehabilitative care (includes speech, occupational, or physical therapy)
- substance abuse rehab services
There are four basic plans available through the exchange. These have varying coverage levels. They include:
- Bronze (60 percent of expenses paid)
- Silver (70 percent)
- Gold (80 percent)
- Platinum (90 percent)
Lower percentage plans will have lower premiums. The downside is higher out-of-pocket costs.
You can also use Covered California's Shop and Compare Tool to discover which health insurance plans you can purchase. This can also help you determine whether or not you qualify for Medi-Cal (California’s Medicaid program for low-income people) or monthly premium assistance.
Many people will want to know how much of a subsidy they qualify for, but the real question is, how much will you pay? Your ultimate decision should be based on your income versus how often you might need to use the coverage. In the case of a chronic illness with frequent doctor visits, for example, you might save more money in the long run by choosing more coverage. The Silver plan is often the wisest economic choice.
The mid-level Silver plan ranges from $224 to $423 per month for a 40-year-old non-smoker in California. The average rate across all 19 price regions is $325.24 per month. Check the Shop and Compare Tool provided by Covered California to compare prices based on age and region.
The challenge is to compare the costs of each plan and decide which offers the best value. A helpful calculator offered by the Kaiser Family Foundation provides an estimate of your subsidy eligibility and how much you should expect to spend on health insurance.
Depending on your income, you may qualify for financial aid to help offset the costs of coverage. This may come in the form of:
- Medicaid coverage
- tax credits
Adults living at or below 133 percent of the federal poverty level (FPL) may qualify for Medi-Cal. Pregnant women living at or below 208 percent of the FPL may also qualify. The FPL for 2015, according to the Health Insurance Marketplace, is:
- $11,770 in individual annual wages
- $15,930 for those in families of two
- $24,250 for a family of four
- $40,890 for a family of eight
As of 2015, the annual maximum out-of-pocket is $6,350 for individuals. It’s $12,700 for families. This maximum is the upper limit of the amount you have to pay for medical expenses covered by your plan. If you meet this maximum through deductibles and coinsurance payments, your insurance will kick in and pick up 100 percent of any further costs.
This financial protection is designed to reduce the chances of bankruptcy from medical bills not covered by insurance. You may not reach your maximum out-of-pocket costs every year. Still, it’s good to know the amount is reasonable. Otherwise, unexpected expenses related to an injury or severe illness can be challenging.
Tax credits are based on the Silver plan. This helps you determine any extra out-of-pocket costs if you elect a higher or lower plan. The ACA was designed so the Silver plan is more affordable for individuals buying their own insurance. This is regardless of how expensive the healthcare rates are where you live.
To learn more about Covered California, please visit http://www.coveredca.com. You can also call 800-300-1506.
To register, fill out this form on the Covered California website. There are applications for:
Choose the appropriate application and fill it out in its entirety. You can also send an electronic request for assistance. After that, an enrollment specialist will contact you.
Given the downside of not having coverage (including financial risk and federal penalties), you should sign up as soon as you can within the open enrollment period. No matter your current health, it’s important to sign up if you don’t already have insurance.