Covered California’s new state subsidies program provides relief for middle-income Californians

Open enrollment for 2020 is underway, and more Californians than ever before are eligible for financial help for their health insurance.

The reason is a new state subsidy program. It will help lower the cost of coverage for almost 1 million people, including for some middle-income Californians for the first time since the Patient Protection and Affordable Care Act became law in 2014.

“California is making coverage more affordable for low-income families, and we are making history by becoming the first state in the nation to provide financial help to middle-income people like small-businesses owners, early retirees and the self-employed,” Executive Director Peter V. Lee said. “Whether you never thought you could get financial help, or you have checked before, you need to check again because there is new money available that may dramatically reduce the cost of your coverage.”

So far during open enrollment, eligible low-income consumers who qualified for a subsidy are receiving an average of $19 per month per household on top of any federal assistance they receive, while eligible middle-income Californians who have received a state subsidy are getting an average of $526 per month, per household.

For someone like Don from San Jose, who worked in the tech industry for years before retiring early to pursue his passion in history and literature, the state subsidy program is a much-needed financial lifeline. Since his decision to retire, Don has been paying over $33,000 a year for a COBRA Blue Shield PPO Silver plan for himself and his wife. In 2020, they will be receiving $1,282 a month through the state subsidy program. They will pay a net premium of $1,900 per month.

“I feel a weight has come off our financial shoulders, and I have more freedom to pursue my new passion,” Don said. “I’d like to give heartfelt thanks to Gov. Newsom and the state of California for making this possible. I applaud all the resulting help, relief and new opportunities that will be given to other Californians.”

Another big change for 2020 is the restoration of the individual mandate here in California. People who do not get covered could face a penalty administered by the Franchise Tax Board when they file their 2020 taxes in the spring of 2021. A family of four would pay at least a $2,000 penalty, and potentially more, for not having health insurance throughout 2020.

These two new state initiatives, the state subsidy program and the restoration of the individual mandate, are key elements in Covered California’s record-low 0.8 percent rate increase for the upcoming year.

Consumers will need to sign up by Dec. 15 in order to have their coverage begin on Jan. 1, 2020. Those interested in learning more about their coverage options can visit or get free and confidential in-person assistance, in a variety of languages, from a certified enroller. They can also have a certified enroller call them and help them for free, or they can call Covered California at (800) 300-1506.

Open enrollment runs through Jan. 31, 2020. 

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