Frequently asked questions about health insurance
coverage options in California
California’s state-run exchange, Covered California, is widely regarded as one of the most successful established under the Affordable Care Act. During the open enrollment period for 2022 coverage, more than 1.8 million people enrolled in private plans through Covered California, far surpassing previous enrollment totals.
California enacted legislation in 2019 to create a state-based individual mandate and state-based premium subsidy program, both of which took effect in 2020. The individual mandate has a non-compliance penalty that mirrors the federal penalty that was in effect in 2018. California allocated $295 million in state funds to provide premium subsidies to people earning between 400% and 600% of the poverty level, but those subsidies ended up being unnecessary since 2021, due to the additional federal subsidies provided by the American Rescue Plan. So California does not currently provide any additional state-funded subsidies for Covered California enrollees.
Read more about California’s health insurance marketplace.
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.
And California enacted legislation in 2022 (S.B.1473) to ensure that California enrollees can sign up as late as December 31 and still have coverage effective January 1 (as opposed to the December 15 deadline that applies in most states).
Outside of the open enrollment window, a special enrollment period is necessary to enroll in a private individual/family plan, either through Covered California or directly through an insurance company (subsidies are only available through Covered California).
But Medicaid (Medi-Cal) enrollment is open year-round, and Native Americans can enroll in qualified health plans at any time.
There are 12 insurers that offer health coverage through Covered California for 2023. There were 11 in 2021, but Bright HealthCare joined the marketplace for 2022, offering coverage in Contra Costa County. For 2023, however, Bright has exited the market (as is the case in every state where Bright offered individual/family coverage in 2022) but Aetna CVS Health has joined California’s market, keeping the number of participating insurers at 12 for 2023.
The following insurers offer plans for 2023 through Covered California, with varying coverage areas:
- Aetna CVS Health (new for 2023)
- Anthem Blue Cross of California
- Blue Shield of California
- Chinese Community Health Plan
- Health Net
- Kaiser Permanente
- L.A. Care Health Plan
- Molina Healthcare
- Oscar Health Plan of California
- Sharp Health Plan
- Valley Health Plan
- Western Health Advantage
The average rate changes for California medical insurance vary by region, but the overall weighted average increase for individual plans is 5.6% for 2023, before any subsidies are taken into consideration.
Across a four-year period (2020 through 2023), the average annual rate increase works out to about 2.2% in California, since it was so small from 2020 through 2022.
Those averages are across all of the insurers, and the specifics vary considerably from one insurer to another. It’s also important to understand that rate changes refer to full-price premiums, and very few enrollees pay full price. Most people receive premium subsidies, and their after-subsidy rate changes from one year to the next will also depend on how much their subsidy amount changes.
Nearly 1.78 million people enrolled in private plans through Covered California during the open enrollment period for 2022 coverage. This was far higher than the enrollment totals seen in any previous open enrollment period in California.
Nationwide marketplace enrollment also hit a record high for 2022, due in large part to the American Rescue Plan’s extra subsidies.
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.
And in 2020, the state provided additional state-funded premium subsidies to make coverage more affordable for Covered California enrollees. Those are no longer necessary now that the American Rescue Plan and Inflation Reduction Act have made the federal premium subsidies larger and more widely available, although the state plans to again offer them in 2026 if the enhanced federal subsidies are allowed to sunset at the end of 2025.
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.
California has also used state funds to expand Medicaid eligibility to low-income children and young adults who are undocumented immigrants.
Between fall 2013 and mid-2022, enrollment in California Medicaid increased from about 7.75 million to nearly 13.9 million – a 79% increase. California’s Medicaid program is by far the largest in the nation, in keeping with California’s large population.
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 6,590,743 California residents enrolled in Medicare as of mid-2022. About 49% were enrolled in Medicare Advantage plans, while the other 51% 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.)