Big changes to Covered California: Everything you need to know as enrollment kicks off, from financial help to penalties

STOCKTON -- Some critical changes to Covered California -- the state's health insurance marketplace -- are so important this year that the agency's boss came to Stockton last week for the sole purpose of explaining them.

"In many ways, this open enrollment period for 2020 is the biggest year since our first year in 2014. This year there is new state subsidies on top of federal subsidies that will benefit about a million Californians, and this year we have a penalty coming back into law," said Peter Lee, Covered California's executive director.

"So federally last year -- 2019 -- the penalty went away. This year, there is a state penalty. The Franchise Tax Board will basically make you pay $2,000 for your family of four or more if you decide to go without health insurance you can afford," Lee said.

The new law that takes effect Jan. 1 requires most residents to get health insurance or face a penalty when you file your state taxes in 2021. The penalty is based upon income and household size. The penalties are as follows:

• For an individual making less than $45,500, you may pay $695.

• For a married couple making less than $91,000, you may pay $1,390.

• For a family of four making less than $140,200, you may pay $2,085.

There are exceptions, such as not having to pay a penalty if the cost of your health care coverage exceeds a certain percentage of your income.

According to Lee, the best way to avoid a tax penalty is to buy health insurance during Covered California's open enrollment period now through Jan. 31. But in order to have coverage beginning Jan. 1, you will need to sign up by Dec. 15. You can do that by visiting CoveredCA.com or get free, confidential assistance from a certified enroller in a variety of languages. Call Covered California at (800) 300-1506.

The good news, Lee explained, is that many Californians who never qualified for a subsidy in the past will now be eligible for new financial help from the state that will lower the cost of their coverage. And about 75 percent of current enrollees could pay less than they paid in 2019 if they switch to the lowest-cost plan in the same tier.

This includes middle-class families that previously did not qualify for financial help because their incomes exceeded federal limits.

And, for the first time due to the state-imposed mandate, insurance premiums are going down. While rates statewide are dropping an average of 0.8 percent, in San Joaquin County they are dropping by 5.7 percent, according to Covered California data.

And existing consumers in San Joaquin County will see an average reduction of 9.3 percent if they switch to the lowest-cost plan at the same benefit level. Lee shared one example specific to a Stockton couple ages 61 and 62 making $70,000 a year.

In 2019, they did not qualify for federal tax credits because their income exceeded 400 percent of the Federal Poverty Level, and the lowest-cost Silver plan would be $1,967 per month or nearly $24,000 per year.

The same couple in 2020 would be eligible for $1,310 in monthly state subsidies, or nearly $16,000 per year, and the lowest cost Silver plan would cost $551.

Lee believes Covered California, especially with the changes coming in 2020, "is a model for the nation. This helps everybody -- individuals, older folks, early retirees, small business owners."

He said up to 75 percent of residents who are eligible for the new subsidies don't know about them, so that's why Covered California will begin a massive statewide outreach campaign beginning this week with a new marketing campaign that includes television ads starting Nov. 4 with the theme, "You Shouldn't Have To."

The idea is that when you have health insurance, you shouldn't have to make tough choices like whether to try self-treatment or see a doctor.

Contact reporter Joe Goldeen at (209) 546-8278 or jgoldeen@recordnet.com. Follow him on Twitter @JoeGoldeen.

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