Not only are the views of the California coast spectacular, but now they come with the bonus of a buffer to the rising cost of health insurance.
California will be the first state to offer state-funded tax credits for insurance purchased through Covered California, the state insurance Marketplace. The federal government offers credits as well, but many people fall into a coverage gap due to earning too much for Medicaid and the federal credit but too little to afford insurance on their own. The California credits will be paid for in part by a new tax penalty on Californians who do not have health insurance.
The credits are anticipated to help middle-income Californians who previously did not quality for financial assistance because because their income exceeded federal limits and current Covered California enrollees receiving federal assistance could receive additional credits from the state.
California also joins Massachusetts, New Jersey, Vermont, and DC in implementing a state-level insurance requirement and tax penalty. This penalty is similar to the one put in place by the ACA (the individual mandate), which was essentially repealed by Congress in 2017 by making it a $0 penalty.
California estimates that this new policy will result in nearly 230,000 newly insured Californians and that nearly one million people could benefit from the credits. The state is doing what it can to reverse the upward trend of uninsured individuals due to the rising cost of insurance and safeguard against the continued legal challenges to the ACA. These new state insurance requirements and tax penalty have kept premium growth under 1%, which experts say shows that insurers expect more healthy individuals to enter the market.
Open enrollment for an ACA Marketplace plan ends December 15, 2019!