New Research Showing Californians Are Still Unaware of a Penalty for Going Without Health Coverage
Covered California Executive Director Peter V. Lee and State Controller and Franchise Tax Board Chair Betty T. Yee urged Californians on Thursday to get health coverage to avoid paying the new penalty now in effect for 2020. Their urging comes as new research released by Covered California shows that many still do not know about the law that took effect on Jan. 1.
The research also shows that many of those without health coverage do not know there is more financial help than ever before to buy health insurance, including new help for middle-income Californians.
“We all have work to do to make sure people in California know that if they can afford health insurance, they have to buy it this year or they will face a penalty next year,” said Covered California Executive Director Peter V. Lee. “Open enrollment is underway, and there’s more help than ever before. Now is the time to enroll to avoid the penalty and ensure you have the coverage you need.”
Controller Yee, who joined Lee at Thursday’s press conference, said taxpayers need to be aware of the penalty, known as the Individual Shared Responsibility Penalty, so they can take steps to avoid it when they file their taxes next year.
“I encourage everyone to secure qualifying health care coverage as soon as possible so they are not surprised with a state penalty when filing 2020 state tax returns in 2021,” Yee said. “There are lots of ways to get coverage, including through Covered California, where open enrollment continues through Jan. 31, and I urge you to look at all the options to get coverage as soon as you can.”
For those facing a penalty, a family of four could pay at least $2,000 for not having health insurance. Controller Yee said there is an estimator on the Franchise Tax Board website to assist consumers in understanding what they could pay. In addition, Covered California and Franchise Tax Board have developed a fact sheet with more information about the penalty.
For 2020, Gov. Newsom and the state Legislature are making new financial help available to eligible consumers to help further lower the cost of their coverage. More than 500,000 Californians have already qualified for the new subsidies.
A market research report released by Covered California, “Californians’ Understanding of the Mandate to Have Health Coverage and the Awareness of Financial Help,”was conducted by Greenberg Brand Strategy from Dec. 6 to 18, 2019.
Among the findings:
- 1. Many Californians — especially the uninsured — are unaware of the state penalty.
Many Californians reported being unaware of the requirement to have health insurance coverage in 2020 or else pay a penalty, including a majority of the uninsured (56 percent).
- 2. The uninsured are more likely to enroll in coverage if they are aware of the state mandate.
Among the uninsured, 64 percent are more likely to enroll in health insurance to avoid the penalty. This is an increase of intent to enroll from 46 percent when uninsured respondents were asked at the beginning of the survey whether they plan to have health coverage in 2020.
- 3. The state mandate encourages already insured Californians to keep their coverage.
Among the insured population, almost all respondents (91 percent) will keep their health insurance in 2020, and almost half (46 percent) state that avoiding the penalty is a factor in maintaining their coverage.
- 4. Many uninsured people are unaware that financial help is available.
Among the uninsured, 62 percent are unaware that Covered California offers financial help to help pay for health insurance.
- 5. The uninsured are even less likely to know about the new financial help.
Among the uninsured, only 27 percent are aware that Californians can receive even more financial help than ever before for health coverage, compared to the 38 percent who generally know that financial help is available.
- 6. Many uninsured Californians who could get financial help are not finding out if they are eligible.
Nearly all the uninsured respondents surveyed (93 percent) could qualify for financial help. However, most uninsured respondents (62 percent) have not looked to see if they qualify for financial help.
- 7. Uninsured Californians are far more likely to enroll in coverage if given financial help.
More than two-thirds of uninsured respondents stated that subsidies of $500 per month would make them likely to enroll in a health plan.
Uninsured middle-income Californians (making between 401 and 600 percent of the federal poverty level) are even more likely to enroll in coverage if they knew they were eligible for a $500 per month subsidy.
The average subsidy for eligible consumers earning less than 400 percent of the federal poverty level is $447 per month; the average state subsidy for eligible middle-income consumers is $460 per month.
With research showing that most of the uninsured have not checked to see if they are eligible for financial help, Lee encouraged Californians to look into it.
“You can find out in just a few minutes whether you are eligible for financial help from the federal government, the state, or both,” Lee said. “Do not leave money on the table; do not put yourself at risk if you get sick or ill; do not get stuck with a big bill when you pay your taxes in 2021.”
Lee said the population of the uninsured changes every year: With new people turning 26, moving to the state or leaving employer-based coverage to work on their own, there is a new group of Californians to inform every year. That group now includes people with higher incomes who qualify for financial help for the first time.
“California made a commitment to encourage more people to get covered through the penalty and by making that coverage more affordable through new financial help,” Lee said. “Together the penalty and new subsidies are powerful tools to making sure that Californians follow the law and sign up for a health insurance plan that will protect them and their family. We want to make sure they know about it.”