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Covered California will make it simple and more affordable for you and millions of other Californians to get high-quality health insurance that can't be canceled or denied because of a pre-existing medical condition or if you get sick. Legal residents of California will be eligible to buy health coverage through Covered California. Later in the year, you can shop easily online, in person or by phone for health insurance that is affordable for you and your family. A special website will provide you with a variety of online tools so you can learn more about a range of Qualified Health Plans that will be offered through Covered California. You can also access statewide support services available in person or by phone.

Covered California will provide access to coverage that will start in January 2014. Purchasing insurance through Covered California will have many advantages. For the first time ever, you will be able to make true "apples-to-apples" comparisons of health insurance. Covered California is the only place where you can learn about and use federal financial assistance that can help lower your health care costs. Whether you purchase insurance from Covered California or not, you also will benefit from new standards for health coverage. As part of the federal health care law, the Affordable Care Act, all insurance plans must cover Essential Health Benefits such as doctor visits, hospitalization, emergency care, maternity, pediatric care for your kids, prescriptions, among other services. All newly sold health insurance plans – whether sold through Covered California or outside the marketplace — will cover these services.

Covered California will serve you and all Californians by helping to:

  • Improve access to high-quality coverage. More Californians than ever before will have easy access to a wide range of private health plans. More than 5 million Californians who do not have health insurance can benefit from lower-cost coverage. Covered California will help these individuals learn about the health coverage options that best meet their needs. We will also help millions more who are not eligible for financial support, but will benefit by using our marketplace and the insurance protections that will take effect.
  • Make health care coverage affordable. Covered California will help you find out if you are eligible for the sliding scale financial assistance that helps to reduce your health care costs. If your income is very limited, you may be eligible for free coverage through Medi-Cal. Covered California is also helping lower health care costs for all Californians by reducing the number of uninsured and the burden of uncompensated care that is a cost today borne by all of those who have insurance.
  • Improve the health of all Californians. When you have health insurance, you don't have to wait for small health problems to become big ones. You and your family will have access to preventive care and a network of health professionals who are trained to keep you healthy. Covered California will also work to promote prevention and wellness programs that help all Californians.

Commonly Asked Questions About Covered California

Why should I buy health insurance?

Everybody uses the health care system at some point in life. You never know when an accident might happen or your family member will get sick and need to see a doctor. When that day comes, the expenses could be financially devastating. Health insurance will become more affordable, accessible and easier to buy, so it no longer makes sense to take the risk of going without it. By getting health insurance, you not only buy peace of mind for yourself and your family, but also help the entire community since we all end up paying the costs of providing care to those without insurance.

Do I have to buy health insurance?

If you don't have health insurance, you should. Health insurance is an important way to make sure we have access to medical care when we need it. Starting in January 2014, most people will be required to have health insurance or pay a penalty if they don't. Coverage can include employer-provided insurance, coverage you buy on your own, Medicare or Medi-Cal.

The penalty phases in over three years and becomes increasingly severe. In 2014, the penalty will be 1 percent of annual income or $95, whichever is greater. By 2016, the penalty will be 2.5 percent of income or $695. This means that if you do not have coverage in 2014, you will be required to pay a penalty when you file your taxes at the end of the year.

Health Insurance Penalty Phase-In Schedule
Pay the greater of the two amounts
YearPercentage of IncomeSet Dollar Amount
20141%$95
20152%$325
20162.5%$695

The total penalty for the taxable year will not exceed the national average of the annual premiums of a bronze-level health insurance plan offered through the health insurance marketplaces, like Covered California. Health insurance plans will provide proof of coverage for their customers.

Several groups are exempt from the requirement to obtain coverage or pay the penalty, including:

  • People who would have to pay more than 8 percent of their income for health insurance
  • People with incomes below the threshold required for filing taxes (in 2012, $9,750 for a single person and $27,100 for a married couple with two children)
  • People who qualify for religious exemptions
  • Undocumented immigrants
  • People who are incarcerated
  • Members of Native American tribes

If you do not have insurance and do not fit into one of these categories, then you will likely pay a penalty.

How will Covered California help me find health insurance I can afford?

Covered California is creating a health insurance marketplace that will allow you to shop online, over the phone or in person to find the right insurance option for your health needs and budget. You will be able to compare different health insurance plans and learn if you qualify for federal financial assistance such as tax credits that will reduce how much you have to pay each month on a sliding scale, based on your income.

Who can buy health insurance through Covered California?

Legal residents of California who do not have access to affordable health insurance through their employer or another government program will be eligible to purchase health coverage from Covered California.

What kind of health insurance can I buy through Covered California?

Covered California will offer Qualified Health Plans that are the same high-quality health plans available on the private market today. These Qualified Health Plans are guaranteed to provide essential levels of coverage and comply with consumer protections set forth in the Affordable Care Act.

The health plan choices offered by Covered California will be as good as you can get anywhere – even if you are not eligible for financial assistance. Health insurance companies must offer the same products at an identified price whether they are offered through Covered California or in the open market.

In addition to these traditional health plans, Covered California will offer what is called "catastrophic coverage," which helps protect a person from financial disaster in the event of a serious and expensive medical emergency. Catastrophic coverage is not designed for day-to-day medical expenses such as doctor visits, prescription medicines or even emergency room visits. It is designed to cover excessive medical bills that occur above the limit that you would be able to manage financially. Covered California will provide catastrophic coverage for those up to age 30, or those individuals who can provide a certification that they are without affordable coverage or are experiencing hardship.

How will Covered California make it easier for me to compare different health plans?

There will be four basic levels of coverage: platinum, gold, silver and bronze. This ranking system will make it easy to compare plans in the same category or across categories. As the metal category increases in value, so does the percent of medical expenses that a health plan will cover. These expenses happen at the time of health care services – when you visit the doctor or the emergency room, for example. The health plans that cover more of your medical expenses usually have a higher monthly payment but you will pay less whenever you receive medical care.

You can choose to pay a higher monthly cost so that when you need medical care, you pay less. Or you can choose to pay a lower monthly cost so that when you need medical care, you pay more. You can choose the level of coverage that best meets your health needs and budget.

What if I already have health insurance?

If you already have health insurance provided by your employer that is affordable, you do not need to do anything. If you are paying more than 9.5 percent of your household income toward insurance premiums, then you may be eligible for financial assistance available through Covered California. If you have insurance from your employer and apply for a tax credit, Covered California will determine if that health plan is affordable and provides adequate coverage. If that coverage is determined to be affordable and adequate, then you cannot receive a government tax credit for new insurance.

If you have health insurance that you pay for yourself, you may be eligible for financial assistance such as tax credits that can lower your costs. You can purchase the same kinds of health plans from Covered California as you can in the private market, but you can only use tax credits if you buy insurance through Covered California.

When can I purchase coverage through Covered California?

Covered California will open later this year, and continue enrollment until March 31, 2014.You must purchase health insurance during this open-enrollment period to obtain coverage in 2014. If you have a life-changing event such as the loss of a job, death of a spouse or birth of a child, you would be eligible for special enrollment within 60 days of the event. If you do not enroll during this period, you will not be assured a health plan will cover you – either through Covered California or in the private market. The next open-enrollment period begins in October 2014 for coverage in 2015. If you are eligible for Medi-Cal, you can enroll at any time.

How much will it cost to purchase health insurance through Covered California?

The cost of health insurance depends on how much coverage you choose to purchase and whether you qualify for financial assistance such as tax credits that can be paid directly to the private health plan you choose through Covered California to lower your monthly payment. Covered California is the only place where you can use these tax credits to make insurance more affordable. Many Californians who have lower incomes will also benefit from lower costs in whatever plan they choose. Our cost-estimate calculator can help you estimate about how much you will pay per year for insurance coverage and the size of the financial support.

Am I eligible for tax credits?

Tax credits are available for individuals and families who meet certain income requirements and do not have access to affordable health insurance through their employer or another government program.

Eligibility for tax credits is based on a standard, called the federal poverty level that looks at the family income and the number of people in the family. The size of the tax credit is based on a sliding scale, with those who make less money getting a larger financial support to lower the cost of their insurance coverage. Individuals and families who make between 138 percent and 400 percent of the federal poverty level may be eligible for a tax credit. This means that an individual making up to $44,680 and a family of four earning up to $92,200 may be eligible for a tax credit.

There are some key facts about tax credits.

  • Tax credits lower the cost of your premium. Tax credits reduce the amount of the premium you will pay for insurance
  • Tax credits help low- and middle-income individuals and families. Tax credits are available to individuals and families who meet certain income requirements.
  • Tax credits can be used when you enroll. Tax credits can be applied to the cost of your health plan when you enroll – you do not need to wait until you file a tax return at the end of the year.
  • Tax credits are only available through Covered California. You must enroll in a health plan through Covered California if you want to use your tax credits.
  • Tax credits are paid directly to your health plan. These tax credits are paid by Covered California to your health plan to keep your costs low.
  • Tax credits will be adjusted at the end of the year based on your actual income. At the end of the year, the tax credits may be adjusted if your income is different than you anticipated. This means that you will want to notify Covered California if your income changes.
How much will the tax credit help me?

The amount of the tax credit depends on household income and family size of eligible individuals. Below are some examples of potential costs to families in California. Covered California will make available the exact premium and plan choices so you can know exactly what your insurance will cost.

Household SizeAnnual IncomeYearly Cost of Health Insurance (without government subsidy)Yearly Federal Government Subsidy New, Lower Cost of Health Insurance
4$31,900$12,300$11,100$1,200 ($100 per month)
4$88,800$12,300$3,900$8,400 ($700 per month)
1$27,000$4,548$2,460$2,100 ($175 per month)

The tax credits are available when you buy insurance so you do not have to pay all of the premium costs up front and wait for reimbursement. The tax credits will be available to all people who are eligible for them, whether they file taxes or not. The credits are only available for health insurance purchased through Covered California and will be paid directly to your private health plan by Covered California.

Our cost-estimate calculator is a tool you can use now to provide an estimate of the tax credits you might be eligible for.

Am I eligible for cost-sharing subsidies?

In addition to the tax credits that reduce your monthly premium payments, you may be eligible for cost-sharing subsidies that reduce the amount you pay when you get care. Eligibility for subsidies is based on income level and family size. You may be eligible for subsidies if your income is less than about $27,936 for a single person and less than about $57,636 for a family of four in 2012, which represents about 2.5 times federal poverty level. Cost-sharing subsidies are offered by the federal government to reduce the amount of money you have to pay for health care expenses such as copayments or coinsurance.

What if my income changes?

Any eligible Californian without insurance can shop through Covered California for coverage, regardless of income. Your income level helps determine your eligibility for Medi-Cal coverage or a government assistance program, such as a tax credit, to help pay your premium. If your income changes over the year, your tax credit will be adjusted accordingly. If your income increases, you will have to pay the difference at tax time. It will be important that you keep on top of any income changes so you have an idea of how much you will owe at tax time.

If you have Medi-Cal coverage and your income increases to more than $15,415 a year for an individual or $31,810 for a family of four, you would no longer qualify for this no-cost government insurance plan. However, through Covered California, you could find affordable coverage and tax credits to help pay the premiums.

What if I have an existing health condition?

You can still purchase health insurance regardless of any current or past health conditions. Starting in 2014, insurance companies will be required to sell policies to everyone regardless of current or past health issues, and they will be prohibited from using your health status to determine how much your health insurance will cost. You can purchase health insurance regardless of any current or past health conditions, and insurance companies cannot charge you a different premium.

This requirement means whether you buy insurance through Covered California or somewhere else, you cannot be denied coverage or even screened based on a pre-existing medical condition. It is important to remember that this requirement only applies during the open-enrollment periods.

What if I need help choosing health insurance?

There are a number of ways Covered California is helping Californians understand their new health insurance options:

  • Helpful tools and tips on the marketplace website that will launch later in the year
  • Trained state staff available in person or by phone or certified assisters who will be able to meet with you in person in every part of the state
  • Partnerships with a wide range of community organizations and insurance agents to provide educational outreach and support services
  • Assistance offered in many different languages, reflecting the linguistic diversity of the state
Do I have to wait until January 1, 2014 to get health insurance?

If you do not have health insurance, you do not have to wait until Covered California opens to get covered. You may be able to purchase private insurance for yourself by contacting an insurance company directly or working with an agent.

You may be eligible right now for health coverage under Medi-Cal. For more information, consult the Department of Health Care Services here.

If you've been turned down by health insurance companies because of a pre-existing medical condition, you could be eligible for coverage through a temporary, state-run program. More information about that program can be found here.

If you have not yet turned 26 years old and your parents have health insurance, you are now eligible for coverage under your parents' plan. For more information about coverage for young adults, visit www.healthcare.gov/law/features/choices/young-adult-coverage/index.html.


Source: Covered California

Website: www.coveredca.com

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