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Produced by KQED News and The California Report
Starting Jan. 1, 2014, most Americans will be required to have health insurance or pay a fine. It's part of
President Obama's Affordable Care Act. Whether you love it, hate it or are just plain confused, the ACA is
the law of the land. The thousand-page law covers a lot of ground and figuring out what part of it has to do
with you can be a challenge.
We're here for you. This guide explains how the health law affects you, your family or your small business,
here in California. It's for people who already have insurance and people who don't — but want to get it. We
outline the new health insurance options offered to you as a Californian and show you how to access them. If
you're concerned about the cost, we also show you what help is available.
Simple. Understandable. Portable. Shareable.
You can download the printable version of this guide or pull it up on your smart phone or tablet.
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Ready to start? First, pick the category that describes you:
I have health insurance, I do not have health insurance or I am a small business owner.
I Have Health Insurance
AT A GLANCE
If you already have health insurance from your employer, you don't have to do anything. The
new health law does not require employers to change the insurance they provide.
Medicare is largely unchanged by the Affordable Care Act, although the law improves
coverage of prescription drugs.
2. If you're already receiving Medi-Cal, you will continue to do so.
If you buy insurance for yourself or your family, you will have access to a new marketplace
called Covered California. You may also qualify for tax credits to help you pay for health
insurance. Anyone who does not have health insurance can buy it through Covered California.
Most people in California have health insurance, either from their employer or
through a government program such as Medicare or Medicaid. If you are one of
these people, little about your situation will change because of the health law.
That's the headline.
But there are some caveats, so let's dive in.
Employer-based Health Insurance
If you receive health insurance at work, you are likely to continue to do so. But even after the health law
takes effect Jan. 1, employers may change plans, premiums, deductibles or other elements of the insurance
they offer, just as they can now.
The Affordable Care Act mandated several changes that benefit people with health insurance. No waiting
until 2014 for these changes — they're already in effect:
Children can stay on a parent's plan until age 26
Your insurance company cannot drop you if you get sick
You get free preventive care with no co-pay and no deductible, including many cancer
screening tests (although some plans already in effect may be exempt from providing this
Lifetime caps on coverage are banned
That's it. If you have employer-based health insurance, the health law's most significant changes are already
The main change for Medicare beneficiaries is that the Affordable Care Act closes the so-called "doughnut
hole." That's the coverage gap in Medicare Part D, which pays for prescription drugs. Under Part D, seniors
pay a certain initial amount for prescription drugs, then pay all of their costs up to $4,700, when coverage
starts up again. The ACA requires this coverage gap to grow more narrow over time. The gap will be
completely closed by 2020.
Medi-Cal is the government health insurance program for the poor. (In other states, it's called Medicaid.) If
you are currently receiving Medi-Cal, you will continue to do so.
But what many people don't know is that Medi-Cal does not cover everyone who is poor. Under the
Affordable Care Act, California is expanding Medi-Cal to cover more poor people who do not have health
insurance. This guide has more information about the Medi-Cal expansion.
I Am Covered Through the Low Income Health Program. What Do I Do?
The Low Income Health Program (LIHP) was built as a "bridge to reform." On Jan. 1, you will transition to
Medi-Cal. You can read more about Medi-Cal in this guide.
I Buy My Own Health Insurance. What Does the New Health Law Mean to Me?
Right now, people who buy insurance for themselves or for their families have no leverage with insurance
companies. If you're buying your own insurance, you probably pay a much higher premium than a large
company would pay for similar coverage. If you are sick, the insurance company might also charge you a
higher premium or refuse to cover you.
Starting Jan. 1, those insurance practices will no longer be permitted. The new health law restricts what
insurance companies are allowed to consider in setting premiums. Specifically, insurers may no longer use
your health history to set rates. Instead, rates will be based on three factors only: age, where you live, and
number of people in your family. You cannot be turned down or charged a higher premium because you are
The Affordable Care Act also makes it easier for individuals to shop for insurance. As part of the law,
California is setting up a new online marketplace where you can buy health insurance. The marketplace is
called Covered California. Each plan offered on Covered California must offer a standard set of benefits. The
goal is that consumers can make an "apples-to-apples" comparison of competing plans.
Part of Covered California's responsibility is to review all plans that insurance companies want to offer on the
marketplace and then certify those that meet the requirements of the health law. People will be able to shop
for these certified plans and compare prices. In addition, consumers may qualify for subsidies (in the form of
tax credits) to help them pay for insurance.
You can learn more about the new marketplace in this guide.
I Do Not Have Health Insurance
AT A GLANCE
7 million people are uninsured in California.
4. Under the health law, most people must have insurance starting Jan. 1, 2014, or pay a fine.
People who are uninsured may get insurance in one of two ways: an expanded Medi-Cal
program or a new online health insurance marketplace.
People who buy insurance in the marketplace may be eligible for federal tax credits to help
them afford health insurance.
In California, 7 million people do not have health insurance. Many say they cannot
afford it. Others say insurance companies refuse to issue them a policy because
they are sick. Most uninsured people have jobs, or are the children of working
parents, but their employers do not offer health insurance.
What the Health Law Changes for Individuals
Starting Jan. 1, 2014, most people must have health insurance or pay a fine. In the first year, that penalty is
$95 per person or 1 percent of income, whichever is greater. The penalty rises to $695 per person or 2.5
percent of income in 2016. (Penalties for children are half the amount for adults.)
Some people are exempt from both the requirement and the penalty. These include people living in the U.S.
illegally, members of federally recognized Indian tribes and people who are in prison. Other people may be
exempt as well.
The Affordable Care Act provides two paths to help uninsured people get health insurance. You can buy a
plan at the state's new health insurance marketplace called Covered California. Alternatively, you may be
covered by an expansion of Medi-Cal, the government's health insurance program for the poor. Your income
will determine which one of these paths is for you.
The New Marketplace — Covered California
In the new marketplace, insurers will no longer be able to deny you coverage because of a current or past
health condition. In addition, many people will qualify for government subsidies — in the form of tax credits
— to help them purchase health insurance.
Expanded Medi-Cal program
Medi-Cal is the government health insurance program for people who are poor or disabled. Under the new
federal law, California is expanding the income limits for the Medi-Cal program. Many more poor people
Which Program am I In?
5. Your income will determine whether you will buy insurance through the marketplace or are covered by
The health law is using a new calculation of income, called Modified Adjusted Gross Income (MAGI). In
general, it's the total of your adjusted gross income — plus any tax-exempt income you might have. To
estimate your MAGI, add the income on lines 8b and 37 from your tax return.
Look at the chart below. If your 2013 income is at or below the number that corresponds to your household
size, you are probably eligible for Medi-Cal. This guide has more information about the Medi-Cal expansion.
If your income is higher than the number you see below, you may buy insurance on the Covered California
marketplace. This guide has more information about Covered California.
One disclaimer: the income amounts shown are approximately 138 percent of the federal poverty level. That's
the new upper limit for Medi-Cal.
This chart is intended as a rough guide. If your income is close to the one that matches your household size,
you will need to apply for either Medi-Cal or Covered California in order to determine which program you
Household Size Income
One final note: Immigrants who are living in the U.S. illegally do not qualify for any benefits under the
health law. They will not be assessed the penalty if they do not have health insurance.
Immigrants who have a green card are eligible for the same benefits of the Affordable Care Act as U.S.
citizens. They may need to pay a penalty if they do not have health insurance.
For immigrants who fall into another category (such as DACA-eligible), please refer to the National
Immigration Law Center.
6. I Am a Small Business Owner
AT A GLANCE
Covered California is opening a special marketplace for small businesses. "Small" is defined
as 50 or fewer full-time equivalent employees.
Small business owners who provide health insurance may be eligible for a tax credit to help
cover the cost. Eligibility is based on the number of full-time employees and the employees'
wages, among other factors.
Right now, small business owners face a disadvantage when shopping for health
insurance for their employees. Because you, as the owner, do not have as many
employees as large businesses do, it's harder for you to get the best prices.
What the Health Law Changes for Small Business Owners
Under the Affordable Care Act, small business owners will be able to purchase health insurance for their
employees on a special marketplace called "SHOP," the Small Business Health Options Program. SHOP is
run by Covered California, which also runs the new marketplace for individuals and families. The SHOP
marketplace is expected to launch this summer.
In SHOP, you will be part of an insurance pool made up of small businesses across California. This is new
under the health law. The goal is to give small businesses access to more plans and more buying power, just
as large businesses have traditionally had.
If you currently offer health insurance and have a broker you work with, your broker can help you pick a plan
on SHOP. If you don't have a broker, you may seek help navigating SHOP from Covered California, if you
Does the Health Law Require That Small Businesses Provide Health Insurance?
No. The Affordable Care Act does not require that businesses with fewer than 50 full-time equivalent
employees (defined as 30 hours per week) provide health insurance. But if your business has 50 or more
FTEs, you could be subject to penalties if you do not provide insurance.
What Businesses Are Eligible for This Tax Credit I Keep Hearing About?
First, the tax credit is available now. If you currently offer health insurance, you can claim the credit on your
income tax return, if you are eligible.
7. The major qualifying factor is the size of your business. Only companies with 25 or fewer full-time
equivalent employees are eligible. Eligibility is further determined by several other factors including:
Your average annual wages are less than $50,000 per full-time equivalent employee
You pay at least 50 percent of the health insurance premium for your employees
Both businesses and nonprofits are eligible. The tax credits are available on a sliding scale: up to 35 percent
of premiums in tax year 2013 and up to 50 percent of premiums in tax year 2014. Covered California can
help you determine your own eligibility. Tax credits are available for a total of two consecutive years.
If I Decide to Provide Health Insurance to My Employees, How Does Covered California Help Me?
Private health insurance companies will offer plans in SHOP. Covered California is currently developing a
standard set of benefits that all plans on the SHOP marketplace will need to offer.
Health plans in Covered California will be offered in "tiers" of coverage: platinum, gold, silver and bronze.
The difference between the tiers is not what benefits are covered, but the cost of coverage. For example,
platinum plans have higher premiums and people pay less when they see the doctor. Bronze plans have much
lower premiums, but people pay more when they see the doctor.
Once you pick which tier of coverage you wish to offer your employees, you'll then decide how much of the
premium you will pay, either a specific dollar amount or a percent of the premium. Under the health law,
your contribution must be at least 50 percent of the premium's cost. Your employees can then pick any plan
within that tier, and they will pay the remainder of the premium.
You will make a single monthly payment to Covered California, which will then handle premium payments
to the specific health plans your employees choose.
Do I Have to Cover My Employees' Families, Too?
All of the plans offered in SHOP will be open to spouses and dependents. But you will decide if you wish to
offer insurance to your employees only or to your employees and their families. If you decide against
covering family members, they can still seek coverage on the individual market offered by Covered
California. Dependents may also be eligible for Medi-Cal.
When Does SHOP Open?
SHOP will open on Oct. 1. That's when you can formally select which tier you want for your employees.
Coverage will start Jan. 1, 2014. Covered California has not yet announced specific plans or specific
premiums. We should know more about plans and premiums this summer and will update this guide when
that information comes out.
I Am Covered by Medi-Cal
8. AT A GLANCE
Right now, many people who are poor are not eligible for Medi-Cal. For example, adults who
do not have children cannot get Medi-Cal coverage.
Under the health law, California is expanding Medi-Cal so that more people will be covered.
You qualify if your income is less than about $15,400 for an individual or $32,000 for a
family of four.
Medi-Cal is the government health insurance program for people who are poor. Many
people mistakenly think that Medi-Cal covers all poor people. It does not. For
example, adults without children are barred from Medi-Cal coverage.
What the Health Law Does
The Affordable Care Act provides significant funding for a dramatic expansion of Medi-Cal. The program is
called Medicaid in other states.
Starting Jan. 1, 2014, anyone earning up to 138 percent of the federal poverty level is eligible for Medi-Cal.
(You may have heard 133 percent, but 5 percent of income isn't counted. This means the effective threshold
is 138 percent of the poverty level.)
In real dollars, that means individuals making up to about $15,850 a year or a family of four making up to
about $32,500 are now eligible for the insurance. The state estimates that 1.4 million more people will qualify
for Medi-Cal starting on Jan. 1.
In the Past, I've Found the Sign-Up Process Confusing. What Do I Do?
The Affordable Care Act mandates changes in the application process. California is now working to
streamline and simplify its systems so enrollment will be easier. In particular, the health law created a new
definition of income for Medi-Cal. It's called Modified Adjusted Gross Income, or MAGI. Your assets will
no longer be used in determining whether you are eligible.
Specific enrollment forms and information are not yet ready, but check back here and we will provide more
information about how to sign up as soon as the state makes it available.
I'm on Medi-Cal Now. Do I Have to Do Anything to Keep My Coverage?
No. You will continue receiving benefits. You don't need to do anything new. But, just like you do now, you
will need to continue to reapply periodically to maintain your benefits.
9. I Am Covered Through the Low Income Health Program. What Do I Do?
The Low Income Health Program (LIHP) was built as a "bridge to reform." On Jan. 1, 2014, you will
transition to Medi-Cal. Right now, we are still waiting for details from the state as to how that will happen.
We will update this guide when that information is available.
As of this writing, California must still pass a series of laws so the Medi-Cal expansion can move forward.
This process should be finished by late June.
We will provide more information for you as soon as we have it. Please check back to this guide.
How Does the New Marketplace Work?
AT A GLANCE
The state is setting up a new marketplace, called Covered California, where people can buy
All health plans offered in Covered California will feature the same standard set of benefits.
Starting Jan. 1, 2014, insurance companies may consider only three factors to determine the
cost of your premium: age, geography and family size. Your health history will no longer be
considered in setting premiums.
To help you pay for insurance, the federal government is offering tax credits for people who
qualify, based on their income.
For millions of Californians, the new marketplace is the heart of the health law. If
you are uninsured, or buy insurance for yourself or your family, the marketplace is
where you can shop. Remember: starting Jan. 1, 2014, you must have health
insurance, or you will likely pay a penalty. In 2014, the penalty is $95 per person or
1 percent of adjusted income, whichever is greater. But that goes up over time. The
penalty rises to $695 per person or 2.5 percent of income in 2016. (Penalties for
children are half the amount of adults.)
Buying Health Insurance Today
If you're buying insurance for yourself or your family right now, it can be hard to find a policy with
10. comprehensive benefits. Health insurance companies are generally not required to cover specific areas of
care. If you have an illness, the health plan might charge you a very high premium to get the care you want,
perhaps more than you can afford. Or you might find an affordable plan, but the company will not cover the
care you need. For example, the company might exclude specific illnesses based on your health history.
What Changes with the Health Law?
Under the Affordable Care Act, the state is setting up a new marketplace, called Covered California, where
insurance companies will offer plans.
In late May, Covered California announced the 13 plans it has selected for the marketplace. State regulators
are currently reviewing these plans and what they will cost you. While final information on plans and
premiums is coming later this year, Covered California has released a sample of premiums for people in
every region of the state.
The headline is that the average premium, statewide, for a "silver tier" plan (more on that in a minute) is $321
Covered California selected the 13 plans from more than 30 applicants. The agency determined that these 13
plans met the minimum requirements of the Affordable Care Act.
The 13 plans are each offered by a different insurer. Among them are five large companies: Anthem Blue
Cross, Blue Shield of California, Health Net, Kaiser and Molina Healthcare. The remaining eight plans are
offered by local and regional insurers: Alameda Alliance for Health, Chinese Community Health Plan, Contra
Costa Health Services, L.A. Care Health Plan, Sharp Health Plan, Valley Health Plan, Ventura County Health
Care Plan and Western Health Advantage.
Each region of California will offer between two and six of these plans.
How Much Will I Pay?
Again, the average statewide premium for a silver plan is $321 per month.
Under the health law, insurers may consider only three factors when setting premiums: your age, where you
live and your family's size. Insurance companies cannot turn you down or charge you a higher premium
because you are sick or had a previous illness or accident.
To set up the new marketplace, state law established 19 geographic regions. That's the "where you live"
factor insurers may use in setting premiums. You can find out more about these rating regions in this Covered
California booklet (PDF).
You can look up your own region and see a sample of plans and premiums you will be able to choose from.
We will update this guide once Covered California has a full, approved list of plans and premiums.
I've Heard the Government Is Offering Subsidies to Buy Insurance. Tell Me More.
You may qualify for a subsidy — in the form of a tax credit — to help you pay for health insurance. Tax
11. credits are available on a sliding scale, according to your income. More than 2 million Californians will
qualify for a tax credit.
If you earn between 138 and 400 percent of poverty ($15,850 - $46,000 for an individual; $32,500 - $94,200
for a family of four), you may qualify for a federal tax credit. The credit will be applied to the cost of your
premium when you enroll in a plan. In other words, you won't have to wait until tax time to get the credit.
This tax credit will lower the cost of your monthly health insurance premium. But you must buy a plan
through Covered California to qualify for the credit. You cannot apply a credit to a plan you find outside of
Covered California offers a calculator to help you estimate the cost of your insurance after the tax credit has
been applied. The tax credit is based on your ability to pay for the second-lowest-cost silver plan. But you
can apply the credit to any plan you wish to buy (except for a catastrophic plan). More on the "tiers" of plans
Below is a snapshot of rates for a silver tier plan in two of the rating regions in California: Alameda and
Orange County. The top number in black indicates the amount an individual would pay. The bottom number
is the subsidy. "FPL" means "federal poverty level."
Plans have different premiums primarily because of different costs of doctors and hospitals in that plan's
As you can see in the charts, the person whose income is 150 percent of poverty qualifies for the largest
subsidy. The person whose income is 400 percent of poverty makes too much money to qualify for a subsidy.
Please visit Families USA to see where your income would fit in the charts below.
Note that the health law is using a new calculation of income, called Modified Adjusted Gross Income
(MAGI). In general, that's the total of your adjusted gross income — plus any tax-exempt income you might
have. To estimate your MAGI, add the income on lines 8b and 37 from your tax return.
ALAMEDA COUNTY SILVER TIER RATES
150% FPL 200% FPL 250% FPL 400% FPL
ORANGE COUNTY SILVER TIER RATES
12. 150% FPL 200% FPL 250% FPL 400% FPL
What Kind of Coverage Can I Get?
Any plan offered in Covered California must include a standard set of benefits across 10 categories. These
Ambulatory patient services (that means routine doctor's office visits, lab tests, etc.)
Maternity and newborn care
Mental health and substance use disorder services, including behavioral health treatment
Rehabilitative and habilitative services and devices
Preventive and wellness services and chronic disease management
Pediatric services, including dental and vision care
What Is the Difference Between a Silver Tier Plan and Other Plans?
Individual health plans in Covered California will be offered in tiers of coverage: platinum, gold, silver and
bronze. The difference between the tiers is not what benefits are covered. Under the health law, each plan
must offer the same standard benefits.
13. The charts above for Alameda and Orange counties show premiums and subsidies for the silver tier of each
plan. Say you were interested in Kaiser. You could stay with the silver tier or you could pick the Kaiser plan
at a different tier of coverage: platinum, gold or bronze.
The difference between the tiers is cost. If you pay more each month for the premium, you will pay less when
you need health care.
The platinum tier will have the highest monthly premium, but you will have no deductible and a $25 copay
when you see your primary care doctor.
At the other end of the spectrum, in the bronze tier, you will pay much less each month for the premium. But
you will have a $5,000 deductible and a $60 copay when you see your primary care doctor. Silver tier plans
have a $2,000 deductible.
You can decide which tier — and which plan — is for you by considering your own finances and health care
The marketplace will open on Oct. 1, 2013, so you can sign up for a health plan. Your insurance will start on
Jan. 1, 2014.
I Can't Even Afford the Copayment or Deductible. What Do I Do Now?
In addition to the tax credit, the federal government also offers special subsidies based on income and family
size. If your income is less than about 2.5 times the poverty level — $28,000 for an individual or about
$58,000 for a family of four — you may be eligible. These subsidies can help reduce what you have to pay
when you see the doctor or get other health care.
I'm 28 and Healthy. I Only Worry About What I'd Do If I Were Hit by a Bus. Which Plan Should I
You can certainly look at the bronze plan, and see if the coverage makes sense for you. Covered California
also offers a catastrophic plan. It does not cover doctor's visits or even emergency room visits, but is meant to
protect you against catastrophic medical bills. This level of coverage is available to people up to age 30. It's
also available to other people who can demonstrate that they are experiencing financial hardship.
Even with All This Help, I Cannot Afford to Buy Insurance or Pay The Penalty. What Do I Do?
If you are looking at the least expensive plans, and your cost for the premium is greater than 8 percent of your
household income, you are exempt from the requirement to have health insurance. You do not need to pay a
I Don't Like the Insurance My Employer Gives Me. Can I Buy Insurance on Covered California?
You can, but because you are turning down insurance you already have through your job, you are probably
not eligible for the tax credits. But, again, there are exceptions. If you have employer coverage, but the
14. amount you pay for your individual premium is more than 9.5 percent of your income, you may be eligible to
go to Covered California, buy insurance there and apply for a tax credit.
How to Calculate Your Premium
AT A GLANCE
The federal government is offering tax credits to help you afford health insurance.
Eligibility is based on your family size and income.
The tax credit takes effect as soon as you buy health insurance. You do not need to wait until
you file your taxes to get the credit.
The federal government is offering subsidies to help you afford health insurance.
The subsidies are available as tax credits. But you don't have to wait until tax time
to collect this credit. It becomes available to you as soon as you begin paying for
Am I Eligible For a Subsidy?
Your eligibility for the credit is based on your income. If you earn between 138 percent and 400 percent of
the poverty level, you may qualify. For 2013, that's about $15,850 to $46,000 for an individual and $32,500
to $94,200 for a family of four. The subsidies are available on a sliding scale. In other words, the lower your
income, the higher your subsidy amount.
How Can I Find Out How Much of a Subsidy I Might Get?
Covered California, the state's health insurance marketplace, has an online calculator you can use to estimate
the amount of both your premium and your subsidy, if you qualify for one.
Please visit Covered California to calculate your premium, with or without the subsidy.