Obamacare for Californians
Starting January 1, 2014, most Americans will be required to have health insurance or pay a fine. It’s part of President Obama’s Affordable Care Act. Whether you love it, hate it or are just plain confused, the ACA is the law of the land. The thousand-page law covers a lot of ground and figuring out what part of it has to do with you can be a challenge.
We’re here for you. This guide explains how the health law affects you, your family or your small business, here in California. It’s for people who already have insurance and people who don’t — but want to get it. We outline the new health insurance options offered to you as a Californian and show you how to access them. If you’re concerned about the cost, we also show you what help is available.
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At a Glance
- 7 million people are uninsured in California.
- Under the health law, most people must have insurance starting Jan. 1, 2014, or pay a fine.
- People who are uninsured may get insurance in one of two ways: an expanded Medi-Cal program or a new online health insurance marketplace.
- People who buy insurance in the marketplace may be eligible for federal tax credits to help them afford health insurance.
In California, 7 million people do not have health insurance. Many say they cannot afford it. Others say insurance companies refuse to issue them a policy because they are sick. Most uninsured people have jobs, or are the children of working parents, but their employers do not offer health insurance.
What the Health Law Changes for Individuals
Starting Jan. 1, 2014, most people must have health insurance or pay a fine. In the first year, that penalty is $95 per person or 1 percent of income, whichever is greater. The penalty rises to $695 per person or 2.5 percent of income in 2016. (Penalties for children are half the amount for adults.)
Some people are exempt from both the requirement and the penalty. These include people living in the U.S. illegally, members of federally recognized Indian tribes and people who are in prison. Other people may be exempt as well.
The Affordable Care Act provides two paths to help uninsured people get health insurance. You can buy a plan at the state’s new health insurance marketplace called Covered California.
Alternatively, you may be covered by an expansion of Medi-Cal, the government’s health insurance program for the poor. Your income will determine which one of these paths is for you.
The New Marketplace — Covered California
In the new marketplace, insurers will no longer be able to deny you coverage because of a current or past health condition. In addition, many people will qualify for government subsidies — in the form of tax credits — to help them purchase health insurance.
Expanded Medi-Cal program
Medi-Cal is the government health insurance program for people who are poor or disabled. Under the new federal law, California is expanding the income limits for the Medi-Cal program. Many more poor people will qualify.
Which Program Am I In?
Your income will determine whether you will buy insurance through the marketplace or are covered by Medi-Cal.
The health law is using a new calculation of income, called Modified Adjusted Gross Income (MAGI). In general, it’s the total of your adjusted gross income — plus any tax-exempt income you might have. To estimate your MAGI, add the income on lines 8b and 37 from your tax return.
Look at the chart below. If your 2013 income is at or below the number that corresponds to your household size, you are probably eligible for Medi-Cal. This guide has more information about the Medi-Cal expansion.
If your income is higher than the number you see below, you may buy insurance on the Covered California marketplace. This guide has more information about Covered California.
One disclaimer: The income amounts shown are approximately 138 percent of the federal poverty level. That’s the new upper limit for Medi-Cal.
This chart is intended as a rough guide. If your income is close to the one that matches your household size, you will need to apply for either Medi-Cal or Covered California in order to determine which program you qualify for.
One final note: Immigrants who are living in the U.S. illegally do not qualify for any benefits under the health law. They will not be assessed the penalty if they do not have health insurance.
Immigrants who have a green card and have been living in the U.S. five years or longer are eligible for the same benefits of the Affordable Care Act as U.S. citizens. They may need to pay a penalty if they do not have health insurance.
For immigrants who fall into another category (such as DACA-eligible), please refer to the National Immigration Law Center.
Most people in California have health insurance, either from their employer or through a government program such as Medicare or Medicaid. If you are one of these people, little about your situation will change because of the health law. That’s the headline.
But there are some caveats, so let’s dive in.
Employer-based Health Insurance
If you receive health insurance at work, you are likely to continue to do so. But even after the health law takes effect Jan. 1, employers may change plans, premiums, deductibles or other elements of the insurance they offer, just as they can now.
The Affordable Care Act mandated several changes that benefit people with health insurance. No waiting until 2014 for these changes — they’re already in effect:
- Children can stay on a parent’s plan until age 26
- Your insurance company cannot drop you if you get sick
- You get free preventive care with no co-pay and no deductible, including many cancer screening tests (although some plans already in effect may be exempt from providing this benefit)
- Lifetime caps on coverage are banned
That’s it. If you have employer-based health insurance, the health law’s most significant changes are already in place.
The main change for Medicare beneficiaries is that the Affordable Care Act closes the so-called doughnut hole. That’s the coverage gap in Medicare Part D, which pays for prescription drugs. Under Part D, seniors pay a certain initial amount for prescription drugs, then pay all of their costs up to $4,700, when coverage starts up again. The ACA requires this coverage gap to grow more narrow over time. The gap will be completely closed by 2020.
Medi-Cal is the government health insurance program for the poor. (In other states, it’s called Medicaid.) If you are currently receiving Medi-Cal, you will continue to do so.
But what many people don’t know is that Medi-Cal does not cover everyone who is poor. Under the Affordable Care Act, California is expanding Medi-Cal to cover more poor people who do not have health insurance. This guide has more information about the Medi-Cal expansion.
I Am Covered Through the Low Income Health Program. What Do I Do?
The Low Income Health Program (LIHP) was built as a “bridge to reform.” On Jan. 1, you will transition to Medi-Cal. You can read more about Medi-Cal in this guide.
I Buy My Own Health Insurance. What Does the New Health Law Mean to Me?
Right now, people who buy insurance for themselves or for their families have no leverage with insurance companies. If you’re buying your own insurance, you probably pay a much higher premium than a large company would pay for similar coverage. If you are sick, the insurance company might also charge you a higher premium or refuse to cover you.
Starting Jan. 1, those insurance practices will no longer be permitted. The new health law restricts what insurance companies are allowed to consider in setting premiums. Specifically, insurers may no longer use your health history to set rates. Instead, rates will be based on three factors only: age, where you live, and number of people in your family. You cannot be turned down or charged a higher premium because you are sick.
The Affordable Care Act also makes it easier for individuals to shop for insurance. As part of the law, California is setting up a new online marketplace where you can buy health insurance. The marketplace is called Covered California. Each plan offered on Covered California must offer a standard set of benefits. The goal is that consumers can make an “apples-to-apples” comparison of competing plans.
Part of Covered California’s responsibility is to review all plans that insurance companies want to offer on the marketplace and then certify those that meet the requirements of the health law. People will be able to shop for these certified plans and compare prices. In addition, consumers may qualify for subsidies (in the form of tax credits) to help them pay for insurance.
Important caveat: The health law also phases out certain types of insurance policies because these policies do not meet the ACA’s health coverage requirements. People with one of those policies will have to buy a new policy, and it may be more expensive.
You can learn more about the new marketplace in this guide.
Health Anthem Blue Cross of California has agreed to a two-month extension of about 104,000 individual policies after failing to give the required 90-day cancellation notice, state Insurance Commissioner Dave Jones announced Tuesday.
The policies had been set to expire on Dec. 31 but will be extended until Feb. 28 for those who choose to re-enroll. Notices informing customers of the extension will be sent out this week, Anthem said.
Anthem spokesman Darrel Ng said a subset of individual customers was “inadvertently omitted from the original mailing” notifying them that their policies were being terminated. He declined to say how many Anthem customers were being notified their policies were ending.
For millions of Californians, the new marketplace is the heart of the health law. If you are uninsured, or buy insurance for yourself or your family, the marketplace is where you can shop. Remember: starting Jan. 1, 2014, you must have health insurance, or you will likely pay a penalty. In 2014, the penalty is $95 per person or 1 percent of adjusted income, whichever is greater. But that goes up over time. The penalty rises to $695 per person or 2.5 percent of income in 2016. (Penalties for children are half the amount of adults.)
Buying Health Insurance Today
If you’re buying insurance for yourself or your family right now, it can be hard to find a policy with comprehensive benefits. Health insurance companies are generally not required to cover specific areas of care. If you have an illness, the health plan might charge you a very high premium to get the care you want, perhaps more than you can afford. Or you might find an affordable plan, but the company will not cover the care you need. For example, the company might exclude specific illnesses based on your health history.
What Changes with the Health Law?
Under the Affordable Care Act, the state has set up a new marketplace, called Covered California, where insurance companies offer plans.
The headline is that the average premium, statewide, for a “silver tier” plan (more on that in a minute) is $373 per month. In addition, many people will be eligible for subsidies to help pay the premiums.
In early 2013, Covered California reviewed applications from 30 different plans. In August, 12 final plans were announced. Covered California and state regulators determined that these plans all met the minimum requirements of the Affordable Care Act.
The 12 plans are each offered by a different insurer. Among them are five large companies: Anthem Blue Cross, Blue Shield of California, Health Net, Kaiser and Molina Healthcare. The remaining seven plans are offered by local and regional insurers: Alameda Alliance for Health, Chinese Community Health Plan, Contra Costa Health Services, L.A. Care Health Plan, Sharp Health Plan, Valley Health Plan, and Western Health Advantage.
Each region of California will offer between two and six of these plans.
How Much Will I Pay?
Again, the average statewide premium for a silver plan is $373 per month.
Under the health law, insurers may consider only three factors when setting premiums: your age, where you live and your family’s size. Insurance companies cannot turn you down or charge you a higher premium because you are sick or had a previous illness or accident.
To set up the new marketplace, state law established 19 geographic regions. That’s the “where you live” factor insurers may use in setting premiums.
You can easily compare specific plans and premiums available to you — according to where you live, your age and the number of people in your family — by using Covered California’s online calculator.
I’ve Heard the Government Is Offering Subsidies to Buy Insurance. Tell Me More.
You may qualify for a subsidy — in the form of a tax credit — to help you pay for health insurance. Tax credits are available on a sliding scale, according to your income. More than 2 million Californians will qualify for a tax credit.
If you earn between 138 and 400 percent of poverty ($15,850 – $46,000 for an individual; $32,500 – $94,200 for a family of four), you may qualify for a federal tax credit. The credit will be applied to the cost of your premium when you enroll in a plan. In other words, you won’t have to wait until tax time to get the credit.
This tax credit will lower the cost of your monthly health insurance premium. But you must buy a plan through Covered California to qualify for the credit. You cannot apply a credit to a plan you find outside of the marketplace.
Covered California offers a calculator to help you estimate the cost of your insurance after the tax credit has been applied — and to help you compare the prices of the different plans available to you. The tax credit is based on your ability to pay for the second-lowest-cost silver plan. But you can apply the credit to any plan you wish to buy (except for a catastrophic plan). More on the “tiers” of plans below.
Below is a snapshot of rates for a silver tier plan in two of the rating regions in California: Alameda and Orange County. The top number in black indicates the amount an individual would pay. The bottom number is the subsidy. “FPL” means “federal poverty level.”
Plans have different premiums primarily because of different costs of doctors and hospitals in that plan’s network.
As you can see in the charts, the person whose income is 150 percent of poverty qualifies for the largest subsidy. The person whose income is 400 percent of poverty makes too much money to qualify for a subsidy. Please visit Families USA to see where your income would fit in the charts below.
Note that the health law is using a new calculation of income, called Modified Adjusted Gross Income (MAGI). In general, that’s the total of your adjusted gross income — plus any tax-exempt income you might have. To estimate your MAGI, add the income on lines 8b and 37 from your tax return.
Alameda County Silver Tier Rates for a 40-year-old
|150% FPL||200% FPL||250% FPL||400% FPL|
|Alameda Alliance for Health HMO||$84 $300||$147 $236||$220 $164||$384 $0|
|Blue Shield EPO||$18 $300||$81 $236||$153 $164||$317 $0|
|Anthem PPO||$57 $300||$121 $236||$193 $164||$357 $0|
|Kaiser Permanente HMO||$65 $300||$129 $236||$201 $164||$365 $0|
Orange County Silver Tier Rates for a 40-year-old
|150% FPL||200% FPL||250% FPL||400% FPL|
|Health Net HMO||$24 $228||$87 $165||$159 $93||$252 $0|
|Anthem HMO||$57 $228||$121 $165||$193 $93||$286 $0|
|Anthem EPO||$60 $228||$123 $165||$195 $93||$288 $0|
|Blue Shield PPO||$62 $228||$125 $165||$197 $93||$290 $0|
|Kaiser Permanente HMO||$103 $228||$167 $165||$239 $93||$332 $0|
What Kind of Coverage Can I Get?
Any plan offered in Covered California must include a standard set of benefits across 10 categories. These are:
- Ambulatory patient services (that means routine doctor’s office visits, lab tests, etc.)
- Emergency services
- Maternity and newborn care
- Mental health and substance use disorder services, including behavioral health treatment
- Prescription drugs
- Rehabilitative and habilitative services and devices
- Laboratory services
- Preventive and wellness services and chronic disease management
- Pediatric services, including vision care. (Parents may buy separate dental plans for their children at additional cost.)
What Is the Difference Between a Silver Tier Plan and Other Plans?
Individual health plans in Covered California will be offered in tiers of coverage: platinum, gold, silver and bronze. The difference between the tiers is not what benefits are covered. Under the health law, each plan must offer the same standard benefits.
The charts above for Alameda and Orange counties show premiums and subsidies for the silver tier of each plan. Say you were interested in Kaiser. You could stay with the silver tier or you could pick the Kaiser plan at a different tier of coverage: platinum, gold or bronze.
The difference between the tiers is cost. If you pay more each month for the premium, you will pay less when you need health care.
The platinum tier will have the highest monthly premium, but you will have no deductible and a $25 copay when you see your primary care doctor.
At the other end of the spectrum, in the bronze tier, you will pay much less each month for the premium. But you will have a $5,000 deductible and a $60 copay when you see your primary care doctor. Silver tier plans have a $2,000 deductible.
You can decide which tier — and which plan — is for you by considering your own finances and health care needs.
The marketplace will open on Oct. 1, 2013, so you can sign up for a health plan. Your insurance will start on Jan. 1, 2014.
I Can’t Even Afford the Copayment or Deductible. What Do I Do Now?
In addition to the tax credit, the federal government also offers special subsidies based on income and family size. If your income is less than about 2.5 times the poverty level — $28,000 for an individual or about $58,000 for a family of four — you may be eligible. These subsidies can help reduce what you have to pay when you see the doctor or get other health care.
I’m 28 and Healthy. I Only Worry About What I’d Do If I Were Hit by a Bus. Which Plan Should I Pick?
You can certainly look at the bronze plan, and see if the coverage makes sense for you. Covered California also offers a catastrophic plan. It does not cover doctor’s visits or even emergency room visits, but is meant to protect you against catastrophic medical bills. This level of coverage is available to people up to age 30. It’s also available to other people who can demonstrate that they are experiencing financial hardship.
Even with All This Help, I Cannot Afford to Buy Insurance or Pay The Penalty. What Do I Do?
If you are looking at the least expensive plans, and your cost for the premium is greater than 8 percent of your household income, you are exempt from the requirement to have health insurance. You do not need to pay a penalty.
I Don’t Like the Insurance My Employer Gives Me. Can I Buy Insurance on Covered California?
You can, but because you are turning down insurance you already have through your job, you are probably not eligible for the tax credits. But, again, there are exceptions. If you have employer coverage, but the amount you pay for your individual premium is more than 9.5 percent of your income, you may be eligible to go to Covered California, buy insurance there and apply for a tax credit.
More than 1 million cancellation notices have been sent to Californians as the Affordable Care Act begins allowing individuals to buy insurance through exchanges, Jones said. The federal law requires policies to offer minimum levels of coverage, forcing companies to terminate many existing plans. But Jones said that under the law, insurers have another year to do so.
California Insurance Exchange Subsides and Tax Credits
ObamaCare subsidizes those with incomes ranging from 139% to 400% of the FLP (federal poverty level) and helps to make Medicaid and CHIP available for those below the 139% mark. in 2013 400% FPL is $45,960 for single person, $62,040 for a family of two, and $78,120 for a family of three. Subsidies are given as refundable tax credits. Subsidies are given as refundable tax credits.
Applying for Subsidies, Tax Credits and Cost Assistance on the California Health Insurance Exchange
In order to get subsidies all you need to do is sign up with the insurance exchange. Once you input your families information and your tax information the system will automatically calculate your subsidies. Since subsidies are reflected as tax credits your cost assistance will not be set in stone until the end of the year. Keep this in mind as you may lose or gain cost assistance as your income fluctuates throughout the year.
Applying for ObamaCare in California
Make sure you have the following information about your and your family before visiting Covered California, your State’s official Health Insurance Marketplace.
Last years tax information for you and your family, Projected incomes for this yearSocial Security Numbers (or document numbers for legal immigrants).
• Employer and income information for every member of your household who needs coverage (for example, from pay stubs or W-2 forms—Wage and Tax Statements).
• Policy numbers for any current health insurance plans covering members of your household.
California Health Insurance Exchange Facts
Some of the latest facts on the Health Insurance Exchange in California.
California has announced that insurance companies have submitted premiums for its state-based ObamaCare exchange, and the rates will come in lower than forecast.
Atnea has pulled out of offering insurance on the health care exchange in California.
Choosing the Right Health Insurance Plan
There are a number of different tiers of plans available on the California Health Insurance Exchange. Plans range from bare bones “bronze” plans which cover 60% of pocket medical costs to “platinum” plans which have greater coverage but come with a hefty 40% excise tax. The plans are as listed below:
NOTE: All cost sharing is of out of pocket costs. Please see ObamaCare health benefits for services that are covered at no out of pocket charge on all plans.
Bronze Plan: The bronze plan is the lowest cost plan available. It has the lowest premiums and in exchange has the lowest actuarial value. The actuarial value of a bronze plan is 60%. This means that 60% of medical costs are paid for by the insurance company, leaving the other 40% to be paid by you.
Silver Plan: The Silver plan is the second lowest cost plan, it has an actuarial value of 70%. This means that 70% of medical costs are paid for by the insurance company, leaving the other 30% to be paid by you. The Silver plan is the standard choice for most reasonably healthy families who historically use medical services.
Gold Plan: The Gold plan is the second most expensive plan, it has an actuarial value of 80%. This means that 80% of medical costs are paid for by the insurance company, leaving the other 20% to be paid by you
Platinum Plan: The Platinum plan is the plan with the highest premiums offered on the California insurance exchange. The Platinum plan as an actuarial value of 90%. This means that 90% of medical costs are paid for by the insurance company, leaving the other 10% to be paid by you. This plan is suggested to those with high incomes and those in poor health. Although coverage is more expensive up front the 90% coverage of costs will help those who use medical services frequently.
California health insurers don’t have to offer every tier of plan, but within the California health insurance Exchanges, all health insurance companies must offer at least one silver plan and one gold plan to consumers.
California Insurance Exchange: Factors that Affect Rates
ObamaCare does away with pre-existing conditions and gender discrimination so these factors will no longer affect the cost of your insurance. Please be aware location, income, smoking status, family size and age all affect the cost of your health insurance premium. So the cost of any their of plan will fluctuate from person to person and from family to family. Please keep this in mind when shopping for insurance on the California health insurance exchange.
Choosing a Health Care Plan: How to Calculated the Cost of Health Insurance
To get started you’ll want to figure out what your budget is for health care this year. Affordable health insurance is defined as 8% of your income. Take your income for last year and find out if you can afford to pay 8%, if not find a number that you feel you can pay. Now that you have an idea of what you can afford it’s time to take a look at the official cost calculator from the Cover California health insurance exchange. This will give you an estimate of what you and your family will pay. Keep in mind that health, age and other factors can increase or decrease the cost of your insurance.
How to Get Started Using the Insurance Exchanges
If you are Californian, Covered California is the Health Insurance Marketplace for you. Instead of HealthCare.gov, you’ll use Covered California’s website to apply for coverage, compare plans, and enroll. People were supposed to be able to enroll as of October 1, 2013, however only Medicaid applications have been processed as of November. Agents have increased access to tools and can explain benefits, network differences, and help you enroll in the highest quality coverage at the most affordable costs. Call Portland Benefits Group for help with your Californai Health Insurance Exchange
Visit Covered California now to learn more.
The California health insurance marketplace open October 1st, 2013