Frequently asked questions about health insurance
coverage options in California
California enacted legislation in 2019 that permanently sets open enrollment dates that differ from the rest of the country. California will continue to have a three-month open enrollment period, running from November 1 through January 31 each year.
As a result of the ongoing COVID pandemic, Covered California has opened a special enrollment period for uninsured residents as well as people with off-exchange coverage. This window continues through December 31, 2021, and gives people access to the newly enhanced premium subsidies created by the Amerian Rescue Plan.
Premium subsidies are not available outside the exchange, and California has an estimated 430,000 people enrolled in plans outside the exchange (directly through California’s insurance companies). Many of them may have been ineligible for premium subsidies before the ARP eliminated the “subsidy cliff” for 2021 and 2022 (note that California started offering its own premium subsidies in 2020, to households earning up to 600% of the poverty level, as long as they were enrolled through the exchange).
Under the ARP, people with income above 400% of the poverty level can qualify for a premium subsidy if the benchmark plan would otherwise cost more than 8.5% of their household income. But they have to transition to the exchange in order to be eligible for the subsidy. Covered California and the state’s insurers have vowed to make this process as smooth as possible.
There are 11 insurers offering individual health plans through Covered California for 2021.
This will grow to 12 in 2022, with the addition of Bright HealthCare in Contra Costa County.
The average rate changes for California medical insurance vary by region, but the overall weighted average increase for individual plans was only about 0.6% for 2021 — the second year in a row with an average rate increase of less than 1%.
The 2021 average rate increases are the smallest they had ever been since Covered CA opened for business (and the 2020 average rate increase had also been a record low). The modest rate increase was due in large part to California reinstating an individual mandate as of 2020.
For 2022, the preliminary average rate increase is 1.8% for individual market plans sold in California. That’s across all of the insurers, and the specifics vary considerably from one insurer to another.
California embraced healthcare reform, creating a state-based health insurance marketplace and expanding Medicaid. According to U.S. Census data, the uninsured rate in California dropped from 17.2% in 2013, to just 7.2% in 2018 (it grew to 7.7% in 2019, in line with the nationwide increase in the uninsured rate under the Trump administration).
Covered California has also helped Californians lower their prescription medication costs. In 2016, the state exchange rolled out a cap on prescription costs. Available to consumers purchasing off-exchange plans as well, the cap is linked to the metal level of the plan purchased and is $250 per specialty medication per month for the majority of consumers.
California embraced the ACA’s Medicaid expansion in 2013, as then-Gov. Jerry Brown signed legislation that was expected to expand Medicaid coverage to over a million Californians.
Between fall 2013 and February 2021, enrollment in California Medicaid plans increased from about 7.75 million to nearly 12.6 million – a 62% increase. California’s Medicaid program is by far the largest in the nation. (About 16% of the nation’s Medicaid enrollees are in California).
Officials had expected MediCal enrollment to grow to as much as 14.5 million people as a result of the widespread job losses stemming from the COVID-19 pandemic, but enrollment was hovering at about 12.5 million as of July 2020, and had dropped a bit by September, as some people were able to start returning to their jobs. It stood at just under 12.6 million as of early 2021.
If you have questions, about Medi-Cal, visit the California Department of Health Care Services website. Note: California’s Children’s Health Insurance Program (CHIP) was previously known as Healthy Families. In 2013, California transitioned Healthy Families enrollees to Medi-Cal.
Read more about California’s Medicaid expansion.
California’s lawmakers passed a bill in 2018 that prohibits the sale or renewal of short-term health insurance plans in California as of January 1, 2019. (The sale of other non-ACA-compliant plans, such as fixed indemnity products and critical illness plans, continues to be allowed.)
Read more about short-term health insurance in California.
There were 6,454,217 California residents enrolled in Medicare plans as of December 2020. About 46% were enrolled in Medicare Advantage plans, while the other 54% were enrolled in Original Medicare.
Read more about Medicare in California, including the state’s rules for Medigap plans.
Prior to the ACA’s reforms in the individual health insurance market, medical history was a factor in eligibility for private plans in nearly every state, including California. Applicants with pre-existing conditions were often unable to buy individual plans in the private market, or if coverage was available it came with a higher premium or with exclusions on pre-existing conditions.
The California Major Risk Medical Insurance Board (MRMIB) was created in 1991 to provide a coverage option for people who were ineligible for coverage under a private plan because of medical history.
Under the ACA, all new health insurance policies became guaranteed issue starting on January 1, 2014. This change largely eliminated the need for high-risk pools, since pre-existing conditions are no longer a barrier to obtaining coverage.
The California Budget Act of 2014 included a provision for MRMIB to cease operations as of July 1, 2014. Most of the MRMIB insureds had already been able to obtain coverage through the exchange or expanded Medicaid, but remaining members were transitioned to the California Department of Health Care Services on July 1.
Here’s a summary of several important health care reform bills that California has enacted in recent years:
- SB4 – This legislation, renamed the Health for All Kids Act, focuses on Medi-Cal access for undocumented immigrant children under the age of 19. SBF took effect in May 2016, making undocumented immigrant children eligible for Medi-Cal based on their household income alone.
- SB10 – This bill was signed into law by Gov. Brown in June 2016. It would have allowed undocumented immigrants to purchase unsubsidized coverage in the exchange, but the state needed a waiver from HHS in order to implement the law. (The ACA does not allow undocumented immigrants to purchase coverage in any state’s exchange, even if they pay full price). California submitted a waiver proposal to HHS, but ultimately withdrew the waiver two days prior to President Trump’s inauguration. California State Senator Ricardo Lara (D, Bell Gardens) had introduced and championed SB10, but he requested that the waiver proposal be withdrawn (and Gov. Brown agreed) because the state was concerned that the Trump Administration could use information from the exchange to deport undocumented immigrants.
- California enacted legislation in 2018 to ban short-term health plans and limit enrollment in association health plans.
- In 2019, California enacted legislation to reinstate an individual mandate in California as of 2020, and to create a state-based temporary premium subsidy program.
- In 2019, California also enacted legislation to extend Medi-Cal eligibility to young adults (through age 25), and that provision took effect in 2020.
California AB5, enacted in September 2019, took effect in January 2020 and requires some businesses to reclassify certain independent contractors as employees. (Here’s a summary of the legislation.) Employees are eligible for various benefits that aren’t provided to independent contractors, including minimum wage ($12/hour in California), worker’s compensation, employer contributions to Social Security and Medicare (FICA taxes), and overtime pay.
And under the ACA’s employer mandate, large employers (50+ full-time equivalent employees) are required to offer their full-time (30+ hours per week) employees health insurance that is affordable and provides minimum value. Coverage does not have to be offered to independent contractors, but large employers must offer health benefits to people who are newly reclassified as full-time employees.
Employers are generally able to use the look-back method of determining whether newly reclassified workers are working full-time, which will give them up to a year to make the determination and begin offering coverage to those who work 30+ hours per week (the look-back method is only available for use if an employee is seasonal or has variable hours, but employers would generally be able to consider newly reclassified workers — who have flexible hours and schedule their own work time — as variable-hour employees.)