Open enrollment for Covered California, the state marketplace that sells subsidized health insurance to Californians who do not get insurance through their employer, begins Tuesday and ends Jan. 31.
Those who sign up by Dec. 15 will have their health coverage take effect Jan. 1. Those who sign up from Dec. 16 to Jan. 31 will have coverage take effect Feb. 1.
About 235,000 middle-income Californians will be newly eligible for financial assistance in 2020 because California will be providing state subsidies for the first time. Until now, people bought plans with the help of federal subsidies, which are available for individuals who make roughly $17,000 to $50,000 a year, or 138% to 400% of the federal poverty level.
The new state subsidies will be available for people who earn $50,000 to $75,000 per person, or 400% to 600% of the federal poverty level. The exact amount a person gets in subsidies is tied to income; the higher the income, the lower the subsidy.
About 1 million Californians currently receive federal subsidies to buy insurance. About 663,000 of them are now eligible to receive an additional state subsidy, but the exact amount will depend on their age and how much health care costs in their region. Covered California officials estimate that the average state subsidy this group will receive is $15 per household per month, on top of the federal subsidy they currently receive.
The state subsidies will cost California about $429 million in 2020, and officials expect much of that amount — $317 million — to come from new tax penalties paid by people who don’t buy health insurance.
California has a state individual mandate, which takes effect in 2020, requiring people to buy insurance or pay a penalty of $695 per adult and $347.50 per child, or 2.5% of annual household income, whichever is higher, to the Franchise Tax Board. The move is in response to Congress repealing the federal individual mandate, required under the Affordable Care Act, in 2017.
Average premiums for Covered California health plans are expected to rise less than 1% in 2020.