The California Guide to Health Insurance Subsidies


November 29, 2019

New California State Insurance Subsidy

t’s that time of year! As soon as October closes out and Halloween is over, Open Enrollment 2020 begins on November 1, 2019. Health insurance is important, but costs continue to rise. The Affordable Care Act (ACA) purports to make healthcare accessible to all and subsidies supplement the costs. It can be a confusing process, but here is what you need to know about subsidies and Covered California in 2020. 


​The Affordable Care Act provides federal subsidies for families who pay a high percentage of their income toward health insurance premiums. A subsidy is money granted by the state or federal government that is distributed in order to keep prices competitive and low. In California, a law was recently passed to help individuals and families bear the burden of health insurance costs. Dubbed California State Premium Assistance, the plan addresses the federal subsidy cliff, which is the point at which the federal subsidy ends and can result in a huge hit to the pocketbook in excess of $10,000 a year. 

​The Affordable Care Act Subsidy

 
The ACA subsidy is for people who make between 100 and 400 percent of the federal poverty level (FPL), and there are two types of federal subsidies: a premium tax credit subsidy and a 
cost subsidy. The former goes toward your monthly premium amount, and the latter goes toward things like your deductible and other expenses. It is possible to qualify for both subsidies depending on your income level. However, if you make one dollar more than 400 percent of the FPL, then you are no eligible for any federal subsidy, which can significantly impact your finances if you were previously eligible.


California State Premium Assistance


California’s new legislation is effective for three years beginning in 2020, and it will help supplement the federal subsidy and avoid the cliff. The state subsidy will extend the subsidy ceiling to those earning up to 600 percent of the FPL. The 2020 Covered California income limits are captured here:

2020 Covered California income limits

The California state subsidy ranges from 9.68-18 percent of your income if you fall between 400-600 percent of the federal poverty level and don’t qualify for the federal supplement. Further, it provides coverage for those earning less than 400 percent FPL in addition to any federal subsidy received. Covered California provides a gradual subsidy transition to even out the sharp cliff of the federal one. For more information on how you can benefit from the California State Premium Assistance program and see if you qualify, give us a call

Share This Post

Taking The Pain Out Of Health Insurance

We make it simple to find the right insurance plans for your needs

In just a few quick steps.

Comments


Posts You Might Also Like


A clipboard with the words one big beautiful bill written on it
By Sackett Insurance Services July 17, 2025
Learn about the Medicare changes expected under H.R. 1 starting in 2026. Understand how funding reductions, dual eligibility, and drug coverage improvements may affect you.
A laptop computer is sitting on top of a wooden desk.
By Sackett Insurance Services July 16, 2025
Unlock 2025 tax savings with health insurance deductions, HSA tips, and expert strategies to lower your taxable income.
A group of people are sitting around a table in a conference room.
By Sackett Insurance Services June 27, 2025
Design standout employee benefits for your startup to attract talent, boost retention, and build a supportive work culture.
A stethoscope is laying on a piece of paper that says medicaid
By Sackett Insurance Services June 10, 2025
Medicaid cuts in 2025 may disrupt patient care, close hospitals, and hurt communities. Learn what’s at stake and how to prepare.
A group of people are standing in front of a large screen.
By Sackett Insurance Services May 29, 2025
Explore 2025 health insurance trends: AI, mental health, premium hikes, and flexible benefits for smarter coverage decisions.
An isometric view of a capitol building surrounded by people.
By Sackett Insurance Services May 16, 2025
Explore how 2025 healthcare policy changes impact coverage, costs, technology, and fairness in the U.S. system.