Health insurance is confusing no matter where you go– even California! Photo by Storyblocks.
Of all 332 million people living in the United States, 39 million live in California. So, about 12% of all Americans are also Californians, making the Golden State the most populous state in the country. This point has two punchlines: 1) if you’re one of the many residents of California— firstly, hi and welcome— chances are you don’t know a whole lot about your state’s insurance policies; and 2) if you are an agent looking to help Californians get insurance in which they are happy with, there is a high likelihood there will be a lot of people needing you!
This article will attempt to break down a few key parts of the California insurance industry so that you can be better informed about what’s going on from Calexico to Crescent City.
Understanding ‘Covered California’ and State-Based Insurance Exchanges
Covered California is a California-tailored digital health insurance marketplace. Covered California allows people to shop around for insurance products, compare coverage options and plans from brand-name companies, and see if they qualify for financial assistance paying for their insurance from the government. If you’re familiar with the terms ACA Marketplace, Marketplace, or Obamacare, Covered California should be easy to wrap your head around. It is essentially the same thing but with a different name and state focus.
We’ll need to jump back a few years to shed further light on the difference between Covered California and the nationally applicable ACA Marketplace. The Health for California website summarizes that when the Affordable Care Act was passed in 2010, “each of the 50 states had to decide to either create a state-run health insurance exchange or offer enrollment through a federally-operated exchange.” California state legislature decided it would be in the best interest of Californians to create their own exchange rather than funnel them into the general insurance marketplace (Healthcare.gov). And thus, Covered California was born! If you’re interested in learning more in-depth information about how the Affordable Care Act was implemented in the state of California, Health for California’s article and reform timeline is an excellent resource.
You may be curious: what other states in the U.S. have chosen to make their own health insurance marketplaces? As of March 2024, 18 states and the District of Columbia have made state-specific marketplaces to serve their residents. You can check out those states and each of their unique offerings by visiting Healthcare.gov’s website.
Does Medicaid Exist in California?
Medi-Cal is California’s version of the Medicaid program. It allows low-income Californians to qualify for free or low-cost health coverage, opening doors to life-saving treatments, prescriptions, procedures, and routine care that they may otherwise not have access to. The application for Medi-Cal and Covered California is the same, so after applying, the program directs people to the proper providers for their situation. While qualifications are income-based, Medi-Cal seeks to cover a wide range of people including individuals, families, families with children, children in the foster care system, seniors, and people who are pregnant, disabled, and/or diseased. The Department of Health Care Services offers a useful online directory and detailed FAQ page for anyone seeking more information about Medi-Cal coverage and how it may apply to their story.
Moreover, the Medi-Cal Access Program (MCAP) exists to help pregnant people afford the costs associated with pregnancy, labor, delivery, and post-delivery up to two years. To qualify for MCAP assistance, the applicant must already be pregnant when they apply, meet a certain income threshold (not too high or too low), and must not already have insurance or be receiving federal aid to pay for their healthcare. Because MCAP is a state-specific program, applicants must be residents of California to qualify. Checking the income threshold chart on the Department of Public Social Services website is an easy way to see if you might qualify for MCAP. Furthermore, if you’re curious about what assistance is available for children in the state of California, this directory from Insure Kids Now is a great place to start.
Does Medicare Exist in California?
Medicare is the federal government’s health insurance program for all citizens 65 and up. While California has its own versions of Medicaid and the federal health insurance exchange with Medi-Cal and Covered California, Medicare is still implemented in the state to cover (most) seniors. Medicare in California operates the same way as it does in other states. There is no Cali-care or Medi-fornia, just plain ole Medicare. Simple enough!
Premiums VS. Penalties: California’s Individual Mandate
Another vital detail about California health coverage involves the state’s individual mandate for health insurance. This mandate means that all individuals are legally required to have health insurance— by law, no one can go without it. As of 2024, unless the state grants you an official exemption, choosing to forgo health insurance in California will cost you a penalty of $900 or more per uninsured adult in your household. The penalty is less for children at about $450 per uninsured child, but still, it adds up.
For example, if a married couple and their child go uninsured for all of 2024, the state of California will issue them a fine of at least $2,250 come tax season. If you are curious about why the mandate exists and its pros and cons, you can check out this information page written by Covered California back in 2023.
The Showrunners
The California Department of Insurance (CDI) regulates Health insurance coverage for Californians. The CDI controls how the insurance industry operates within state lines and has ultimate authority over the laws that protect consumers, license educated brokers and agents, support industry stability, and keep insurance rates and companies in check.
The CDI’s goal is to ensure that the marketing, selling, purchasing, and implementation of insurance in California is transparent and ethical. In support of that aim, they published a detailed webpage going over dozens of different insurance topics, regulations, and updates specific to California— addressing everything from automobile coverage to pet insurance to wildfire-based disasters to cannabis!
If you cannot find what you are looking for on their webpage, we invite you to give us a call at (844) 410-1320. We will be happy to answer any insurance questions you may have!
Have Health Insurance Questions?
We hope that this information on health coverage in California has been helpful for you.
Insurance is oftentimes overwhelming and we want to shed light on the industry by answering your questions. Comment below and your question may be the topic of our next post!
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