The California Open Enrollment Period for health insurance begins on October 15th. All applications submitted between 10/15 and 12/15 will result in a health plan starting on January 1st, 2020.

If you want to renew and stay in your current plan you don’t need to do anything. Your insurance company and/or Covered California will automatically renew your existing health plan for 2020.

The 2020 health plans and pricing will be available online beginning October 15th. Between now and then we can only speculate what your pricing might look like, and we can not submit new applications until 10/15.

Big Changes Are Occurring In 2020!

Your elected officials have been busy in 2019, and they have passed several bills aimed at making CA health insurance more affordable. The changes for 2020 are:

  • Increased premium assistance
  • Penalty for not having health insurance
  • Smaller rate increases

I’ll go over these changes in more detail below.

New California Subsidy To Reduce Cost of Health Insurance

Almost 1 million more Californians will qualify to potentially receive premium assistance in 2020. Individuals and families making up to 600% of the federal poverty level could get a combination of federal and state premium assistance. This assistance can be used to reduce your monthly cost of coverage.

California Premium Assistance Table 2020
Click table to see larger version

The new California subsidy will apply to everyone making less than the amount shown in the far right-hand column above.

As an example, a 62-year-old couple living in San Diego and making $72,000, would not qualify for premium assistance in 2019, but in 2020 will qualify for $949/month in subsidies.

A 49-year-old couple with 2 children, ages 14 and 16, living in San Diego with a household income of $110,000 would not qualify for a subsidy in 2019, but in 2020 would be eligible for $356/month.

The California subsidy tends to have a greater effect for individuals that are age 50 and above, but there may be a benefit even if you are younger.

If your adjusted gross income now falls somewhere in the table above, we need to determine if you can receive premium assistance.

California Creates State Penalty For Those Without Health Insurance

The Affordable Care Act penalty was reduced to $0 in 2019 and California is concerned that this will cause more people to drop health insurance. As a result, a bill was passed that created a new California penalty for not having coverage. This penalty will start on January 1st, 2020.

The California penalty will be enforced by the Franchise Tax Board when you file your state tax returns in 2021.

Here’s how the penalty works.

If you don’t have health insurance, then the penalty is the greater of

$695/adult and $347.50 for each child

OR

2.5% of your Household Income

If you have health insurance for only part of the year, then your penalty amount will be prorated.

Covered CA Says Rate Increases Will Be Small This Year

The initial press release from Covered CA in July says that the “weighted average increase” this year will be 0.8% for California.

In San Diego, the weighted average increase will be 0.2%. As the table below shows, people in Health Net, Kaiser, and Sharp health plans will probably get rate reductions. Everyone else will get rate increases.

Average rate increases for health insurance in San Diego County

HMO plans, again, have the lowest cost increases. In fact, it appears that HMO plans may see an average decrease in San Diego County. Therefore, it may be time to brush up on how an HMO plan works and consider that as an option for 2020.

Why are the rate increases smaller this year versus the large increases in the last 4 years?

Because the copayments and deductibles provided by the most popular health plan, the Silver plan, were reduced. This shifts more of the expense to you. The table below shows the main differences between the 2019 and 2020 Bronze and Silver plan benefits.

Comparison of the changes between 2019 & 2020 of the Silver and Bronze health plans

The Bronze plans are improved in many ways, especially the co-pays. Meanwhile, the Silver plans were downgraded across the board. The big shining improvement to Silver comes in the Ambulance benefit.

In 2019, you end up paying the full cost of an ambulance ride because it is subject to the deductible. In 2020, it becomes a simple $250 co-pay. This will save members $2500 – $4000 on the cost of an ambulance ride.

Key Takeaways For The 2020 Open Enrollment Period In California

Everyone needs to check their eligibility for California’s new premium subsidy. This is an easy step using the California Subsidy tool we provide at SPF Insurance. There is a strong likelihood that if you are 55 to 64 in age and under the 600% FPL limit, that you will get State provided premium assistance.

Switching from a PPO to an HMO plan may be a good way to reduce your monthly costs now and, in the future.

The penalty is coming back, so make sure you have health insurance in 2020. You can go for up to 90 days without coverage and not be penalized.

Just a reminder, health insurance plans, and rates will not be available in quote engines until 10/15/19. Rushing to call before then will not get you results any sooner.

If you qualify for premium assistance, then your application must be done through Covered California. It is possible for you to do this on your own, but the application process can be…confusing and uncertain. Let a broker from SPF Insurance help you enroll, and you can be secure that we’ll get you the most assistance you are eligible for, and we’ll make sure the application is done correctly and quickly.

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