Covered California Extends Enrollment to Help Residents Avoid Penalty

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Two Los Angeles residents learn more about Covered California enrollment at a March 2014 event. (Credit: Ricardo DeAratanha / Los Angeles Times)

Two Los Angeles residents learn more about Covered California enrollment at a March 2014 event. (Credit: Ricardo DeAratanha / Los Angeles Times)

More than 1.5 million people in California have purchased health insurance through a taxpayer funded marketplace, state officials announced Tuesday, the first increase in enrollment after three years of decline.

It’s a 1.6% increase over last year, a jump that comes after the state Legislature imposed a new tax on the uninsured and offered new subsidies to help middle-income earners pay their monthly health insurance premiums. Both changes were aimed at boosting enrollment at a time when the federal government under Republican President Donald Trump has seen enrollment fall nationwide.

But even though the open enrollment period ended Jan. 31, California’s numbers could still increase this year. State officials say many people still don’t know about the new tax on the uninsured, despite a robust state marketing campaign. Most who don’t know will find out when they file their state and federal income taxes by April 15.

That’s why state officials have decided to give anyone who did not know about the tax another chance at signing up for coverage. This “special enrollment period” will end April 30. But anyone who signs up after March 31 would still have to pay the tax. People who did not know about the new state subsidies would also be eligible to enroll.

“I encourage everyone who does not have qualifying health insurance to take advantage of the special enrollment period,” State Controller Betty Yee said in a news release. “I like signing tax refund checks, not assessing penalties.”

Former President Barack Obama’s health care law lets people who don’t have health insurance through their jobs buy coverage through a marketplace, where insurance companies sell individual plans. The law also requires the federal government to help some of those people pay their monthly health insurance premiums, depending on how much money they make.

Most states let the federal government run the marketplace for them. But California has its own marketplace, called Covered California. Nationwide, the number of people purchasing health insurance through these marketplaces has been dropping since Trump took office and the federal government reduced its marketing budget and Republicans in Congress eliminated a tax on people who refuse to buy health insurance.

But last year, under new Democratic Gov. Gavin Newsom, California doubled down on its efforts to boost enrollment. They spent millions of dollars to offer new subsidies to people — so much that families of four earning up to $154,500 could be eligible for assistance. They passed a law that taxes people for not having health insurance, a penalty that could cost a family of four up to $2,000.

California gave people more time to sign up for coverage, extending its deadline through Jan. 31, more than a month after the federal deadline. And they spent a whopping $121 million on marketing and outreach, including $47 million on TV and radio in multiple languages.

The result, announced Tuesday: a 1.6% increase in enrollment in Covered California, while enrollment on the federal marketplace dropped 0.5%.

State officials say a closer look at the numbers shows more reasons to celebrate. California has gotten its enrollment almost back to where it was in 2016. Total enrollment in Covered California is down 2% since 2016, while enrollment in the federal marketplace is down 14%.

But state officials are the most excited about the number of people who signed up for coverage this year who did not have coverage last year. That number — more than 418,000 — is a 41% increase over last year. Covered California Executive Director Peter Lee said new enrollments are important because they tend to be people who are healthier, which helps keep rates down for everyone.

This year, health insurance rates on Covered California increased 0.8%, the lowest increase in five years.

The federal government offers subsidies to people who earn up to 400% of the federal poverty level, or about $100,000 for a family of four. This year, California became the first state in the country to offer subsidies to people who earn up to 600% of the federal poverty level, or $154,500 for a family of four.

State officials said 32,000 people qualified for those first-in-the-nation subsidies, which average about $500 per month. But they estimate at least another 40,000 people are eligible for those subsidies. State officials hope those people will sign up during the special enrollment period.

“Our goal was always to leave no one behind,” Lee said.

Anthony Wright, executive director of consumer advocacy group Health Access California, praised the state for continuing to allow enrollments but urged state lawmakers to spend even more money on subsidies.

“We have more work to do to ensure that every Californian can afford and access care,” Wright said.

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