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Covered California: Financial assistance

October 4, 2013 12:00:00 AM PDT
The enrollment period for Covered California, the state's new health insurance network, kicked off this week. Not all consumers are going to be happy with their new premiums. Many Californians are going to be paying more money out of their pockets. But others will qualify for financial assistance that could dramatically lower their rates.

Covered California: What you need to know

For some Californians, health insurance premiums are expected to increase by as much as 30 percent when the Affordable Care Act begins on January 1.

On the other hand, many individuals and families will qualify for federal financial assistance to help purchase coverage, or they will qualify for Medi-Cal.

That means most moderate- to low-income Californians will actually pay less for insurance and will even enjoy better benefits than before the Affordable Care Act.

"We picked plans based on quality, and based on cost and affordability. We've got very good competitive rates," said Peter Lee, executive director of Covered California.

But for those who qualify for financial assistance, here's what you can expect: There are two types of assistance. One of them is a subsidy that cuts your out of pocket expenses.

"Instead of spending $45 to see a doctor, it can be as low as $3 to visit a doctor -- less than a bus ride," said Lee.

The other comes in the form of an instant tax credit that is paid directly to your insurance provider each month which lowers your premium. Qualifying for the tax credit or the subsidy depends on your income.

Basically, an individual making up to $44,680 and a family of four earning up to $92,200 may be eligible. The amount of the tax credit also depends on your income, as well as your age and the plan you choose.

Using Covered California's cost estimate calculator, here are some examples of how the tax credit can help pay for your coverage:

A 33-year-old single male earning $29,000 a year who chooses coverage with Anthem Blue Cross at the Bronze Level would see a monthly premium of $204, but the monthly tax credit would be $74 so the premium is lowered to $130 a month.

A family with two adults in their 40s and two children under 18 with a household income of $65,000 choosing Health Net at the Silver Level would see a monthly premium of $682, but their tax credit would be $183 lowering their monthly premium to $499.

And finally a couple in their 60s with just $55,000 in income choosing Blue Shield at the Gold Level could expect a premium of more than $1,500 a month, but the tax credit would be $698 a month making their actual insurance premiums $831 a month, nearly half.

Covered California: What you need to know


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