• February 5th, 2023
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Californians Urged to Sign Up for Healthcare Insurance

By Bernard J. Wolfson


If you are uninsured because health coverage seemed too expensive the last time you looked, it’s time to look again.

A new federal law could make it a whole lot cheaper to buy your own insurance if you don’t get coverage through an employer or a government insurance program such as Medicare or Medicaid.

The law, the American Rescue Plan, provides billions of federal dollars to reduce premiums for people who buy their coverage through the insurance exchanges established by the Affordable Care Act.

The aid expands a federal tax credit created by the ACA that you can take upfront as a discount on your premium or claim when you file your taxes the following year. It is not available for those who buy individual or family policies in the open market outside an ACA exchange. So, if you are in an off-exchange health plan, you might save a lot of money by switching to one inside the exchange.

“I was shocked at the amount of reduction in cost.”
Darci Gutierrez, Insurance Agent

Covered California, the state’s ACA exchange, opened a special enrollment period on April 12 for people who want to take advantage of the new aid by enrolling or switching coverage. The period runs through December — 4½ months later than the Aug. 15 special enrollment end date on the federally run exchanges.

Covered California estimates the new money will reduce its customers’ monthly premium bills by an average of $180 per household. Nearly 90% of Covered California enrollees already get financial aid, and many will now get more. Some enrollees who didn’t previously qualify for tax credits may now be eligible.

Darci Gutierrez, an insurance agent in Dublin, California, says a client with a large family saved $425 a month on a Blue Shield PPO at the silver tier — the second-lowest level in the ACA’s four-tier system of coverage.

“I was shocked at the amount of reduction in cost. I was like, ‘Holy cow,’” Gutierrez says.

The additional federal aid is slated to stop after 2022, which means your insurance could cost you more after that. But there is talk in Congress about extending the enhanced tax credits for longer.

The new law follows the lead of California, which provided groundbreaking state-funded tax credits starting last year to augment the ACA credits and push eligibility for aid well into the middle class. The new federal dollars will provide assistance even further up the income scale.

Covered California estimates 100,000 consumers with incomes too high to qualify for federal or state credits under prior law will now be eligible for subsidies averaging $500 a month per household.

The share of the new money going to California could be about four times as much as those state-funded subsidies and will completely replace them, saving the state about $761 million this fiscal year and next.

The newly enhanced federal tax credits take effect with coverage that starts May 1. To get coverage for the first of any month, you need only sign up by the day before.

If you are currently enrolled in Covered California, you can keep your plan and take the savings, or you could shop around and save even more — or switch to a higher level of coverage without increasing your monthly bill.

If you are a current enrollee, Covered California — unlike the federally run exchanges — will automatically calculate your lower premium, and you will see a credit for May on your June bill. You will also reap that saving retroactively for the first four months of 2021 in the form of an additional premium reduction, in equal monthly installments, over the rest of the year.

If you are uninsured or in an off-exchange health plan, however, you need to take action. The money won’t just come to you. Research your options and enroll.

To find out if you qualify for federal assistance, log on to www.coveredca.com.

Click the “shop and compare” button to find the health plans available to you in your area, along with the monthly premium you will pay after your tax credit.

You can also click a button to get a call from a licensed health insurance agent who can help you figure it all out — without charging you. If you don’t have a computer, call Covered California at 800-300-1506.


Bernard J. Wolfson is the Managing Editor for California Healthline. This story was produced by Kaiser Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.


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