There are some situations where an individual is either self-employed with no other employees, or they are employed by a small company that does not offer health insurance coverage. In these cases, the only real option available – aside from remaining uninsured – is to purchase an individual insurance plan.
The State of Health Insurance Coverage in California
Prior to 2014, you could purchase an individual health insurance plan at any time of the year. But today you can only buy individual health insurance during the open enrollment period, except for special circumstances.
The Patient Protection and Affordable Care Act, more commonly known as the Affordable Care Act (ACA), was signed into law by President Obama on March 23, 2010. It quickly became commonly referred to by the nickname “Obamacare.”
One of the key requirements of Obamacare is that it requires that most Californians enroll in a health insurance plan or face tax penalties. Then, in 2017, the Trump administration succeeded in seeing the Tax Cuts and Jobs Act of 2017 passed by Congress.
An important piece of this legislation essentially eliminated the federal tax penalty for not being enrolled in health insurance starting in the tax year 2019. For California residents who welcomed this change it was a joy that was short-lived.
As the Daily News reported in August 2019,
“Senate Bill 78, signed by Gov. Gavin Newsom on June 27, requires California residents to have health insurance or pay a penalty, and it provides subsidies to individuals with incomes up to six times the federal poverty level. That’s an income of about $75,000 per year for an individual, and up to $154,500 for a family of four. The state subsidies are in addition to the federal subsidies offered under the Affordable Care Act.
According to the law, money to pay the subsidies will come from the revenue collected in penalties from people who don’t buy insurance. The state has set the annual penalty at $695 per adult and $347.50 per child, or 2.5 percent of a household’s gross income, whichever is greater. Money from the penalty payments will also be used to pay for the extension of full-scope Medi-Cal coverage to low-income undocumented immigrants through age 25.”
According to the new law, which goes into effect January 1, 2020, exceptions from the penalty include people in the United States illegally, people in prison or members of an American Indian Tribe. California also banned short-term medical insurance in 2019 to prevent individuals moving away from comprehensive ACA plans.
So, if you did not have health care coverage for 2019, it appears you will have dodged a tax penalty. However, regardless of your age or high quality of health, most all experts agree that it is still a smart move to obtain health insurance coverage.
Issues to Consider With Individual Health Insurance Plans
According to the website at HelathForCalifornia.com,
“Before purchasing individual health insurance, you need to think about your health care needs and budget. Then, compare various plans to find the most suitable fit. Here are some questions you need to consider:
- How is the plan structured?
- Which providers are in the network?
- What is covered by the plan?
- How much out-of-pocket costs do you pay?
- How much does the plan pay for your coverage?
Think about your budget as well as your health care needs and find out how much it will cost you in insurance premiums and out-of-pocket costs for every plan you consider.”
Make certain that what you’re considering buying is long-term health insurance. Be aware of limited products such as temporary insurance that you may not be able to renew at the end of the temporary period.
Also, you should always take the time to read all information concerning deductibles and any annual caps. The deductible is the amount of money you must pay out of pocket before your insurer starts paying. some policies may have multiple deductibles, such as for each family member.
While the government bans annual dollar limits on most covered health benefits, plans are permitted to put an annual dollar limit and a lifetime dollar limit on spending for health care services that are not considered essential health benefits.
Another important point to know is that there are a few major types of health insurance plans to choose from.
- Preferred Provider Organizations (PPOs) A PPO has a network (or group) of preferred providers. You pay less if you go to these providers. Preferred providers are also called in-network providers.
- Health Maintenance Organizations (HMOs) You must have a primary care doctor who provides your basic care and makes referrals to specialists. HMOs will not pay for those services provided outside their network aside from emergency and urgent care visits.
- Exclusive Provider Organization (EPOs) Generally, you’re not required to have a primary care doctor, nor get referrals for specialists if they are in-network. You cannot go outside the network for covered care except for emergency or urgent care situations.
It’s also important to be aware that healthcare plans that are even in the same “category” (Bronze, Silver, Gold and Platinum) can have significant differences. But simply trying to read through all the information provided to you may not be enough to make the best choice in an individual health care plan. This is why the help of a competent California health insurance agent will help you make an informed decision when choosing the best insurance protection for your business or personal needs.
Choosing Your Individual Insurance Plan in California
Taking time to understand the basics of healthcare insurance coverage and how plans work can save you money and help you choose a plan that provides the benefits and coverage you really need.
As we noted at the start of this post, if your employer doesn’t provide health benefits, an individual or family plan may be the best option for you. The Affordable Care Act (ACA) mandates, among other things, that you can no longer be denied health insurance coverage due to a pre-existing health condition and you can’t be denied benefits due to pre-existing exclusion periods.
There are a number of resources to help you in learning about health insurance plans in California such as the California Department of Insurance and Healthcare.gov, along with seeking out resources from a good agent like JC Lewis Insurance Services.