What Is Covered California?

Lora Shinn is Investopedia's senior editor of insurance reviews, building on 15 years of experience covering insurance and other personal finance topics as a freelance writer and editor. Her articles have also been published by CNN Money, U.S. News & World Report, and Bankrate, among others.

Covered California allows Golden State residents and small businesses to shop for health insurance providers. Covered California offers state healthcare administration and assistance, including an online health marketplace like ACA Health Insurance Marketplace. The types of health insurance provided for adults and children include:

• Health insurance
• Medi-Cal, for low-income Californians
• Dental coverage
• Vision coverage

Learn more about how Covered California works, including enrollment periods, discounts, qualifications, and penalties.

Key Takeaways

• Covered California is the marketplace for Californians to purchase health, vision, and dental coverage, or to qualify for Medi-Cal.
• By buying through Covered California, many enrollees qualify for helpful discounts on insurance, including reduced premiums.
• Open enrollment is between Nov. 1 and Jan. 31, but many life circumstances may qualify you for a special enrollment period.
• Covered California plans are similar to ACA plans, but do offer a few different plans.

How Covered California Works

Covered California offers plans from all of the top health insurers active in the state. Federal law requires Covered California plans to offer essential health benefits. These plans are the same as the plans available outside of the marketplace.

“Some Californians have a misconception that Covered California is ‘government insurance,' or they would be getting a lesser health plan, which is completely false,” Craig Tomiyoshi, deputy director of communications at Covered California said.

Small businesses can apply for employee health and dental insurance plans via the Covered California for Small Business marketplace.

Enrollment Periods

Any Californian can enroll in Covered California between Nov. 1 and Jan. 31 each year. However, coverage doesn’t start right away. After you choose a plan, the plan begins on the first day of the following month.

Outside of the open enrollment period, Covered California offers an extremely comprehensive list of more than two dozen life events that could qualify you for a special enrollment period, including:

• Administrative: Incomplete application due to time; misinformation from an agent.
• Economic: Income less than 150% federal poverty level; paid the tax penalty for no health insurance; newly qualifying for health insurance stipend.
• Emergencies: Affected by public health emergency or wildfires or another public state of emergency.
• Life event: Had, adopted, or fostered a child; got married or are in a domestic partnership; lost or will soon lose health insurance.
• Location: Permanently moved to or within California; gained citizenship; returned from active-duty service.

Unfortunately, you aren’t eligible for coverage until your employer-sponsored plan expires. If you experience a sudden job and benefits loss, you could have a gap between when you sign up for Covered California insurance and when coverage begins. If so, consider COBRA coverage after termination if your employer offers it.

Discounts

Many Californians who are uninsured said the main reason they don't have insurance is because of the cost, Tomiyoshi said. Covered California, now in its eleventh year, has undergone substantive changes to make the program more affordable, he said.

“More financial help is available for more Californians than ever before to help them get health coverage,” he said. “The increased federal subsidies through the Inflation Reduction Act combined with California’s new Cost-Sharing Reduction program will help reduce out-of-pocket costs for many Covered California members.”

Almost 90% of Covered California’s enrollees get financial help. Covered California allows applicants to qualify for help paying for health plans or enrolling in Medi-Cal, California's version of Medicaid.

• The Premium Tax Credit: Either lowers your monthly premium cost or offers a tax credit when you file taxes. Around 20% of enrollees benefit from $0 premiums.
• Cost-sharing reductions: Reduces your deductible, copays, and coinsurance if you earn 250% or less of the Federal Poverty Level. The federal poverty level depends on your household size and income. More than 650,000 enrollees qualify for unique plans with these reductions.

Covered California subsidies kick in at an income of up to $33,975 for a single person and $69,375 for a family of four in 2024.

Penalties

Although health insurance isn’t mandatory at the federal level, California requires state residents to have health insurance. Otherwise, they may pay a hefty penalty when filing state tax returns. For 2024, the penalty is $900 per adult and $450 per dependent child under 18 living in the household.

Covered California offers tax penalty exemptions, but only in limited situations:

• Hardship: Such a bankruptcy, natural disaster, eviction, and other life circumstances.
• Affordability hardship: The lowest-cost plan available costs more than 8.17% of your 2023 household income.
• Religious conscience: Your faith doesn’t allow medical healing or acceptance of public health benefits.

You may also be able to claim some exemptions when you file your state tax return.

Types of Covered California Plans

Like other ACA plans, Covered California plans may be offered as health maintenance organizations (HMOs), preferred provider organizations (PPOs), and exclusive provider organizations (EPOs). Covered California offers plans from 12 companies. Not all plans are available in all locations, but 92% of Californians can choose from four or more carriers.

Also, like ACA plans, Covered California health insurance plans come in four tiers. However there are some differences, particularly around cost-sharing reduction plans:

High-Deductible Bronze Plans

High-Deductible Bronze Plans allow enrollees to open a health savings account (HSA). The plans are a good fit for those who want to save in a tax-advantaged account and think they’ll use fewer non-preventive medical services.

Silver Enhanced Cost Sharing Reduction Plans

These California-only plans offer more benefits for lower out-of-pocket costs, including $0 deductibles. They’re only available to households at or below 250% of the Federal Poverty Level.

Catastrophic Plans

A minimum coverage plan (also known as a catastrophic plan) is typically only available to those 30 or younger. However, Covered California only sells these plans to adults under age 30.

Adults 30 and older must apply for an affordability or general hardship exemption. You apply for a general hardship exemption through Covered California for approval and an Exemption Certificate Number (ECN). Then, you buy a catastrophic plan directly from an insurance company.

“Covered California encourages consumers interested in a catastrophic plan to consider a Bronze plan instead,” Tomiyoshi said. “The premium costs are often similar, and deductibles are usually lower on a Bronze plan. Bronze plans are available to everyone without needing an exemption.”

Requirements for Covered California

All U.S. citizens, U.S. nationals, and noncitizens residing in California can apply for health care through Covered California if lawfully present. But you’re not lawfully present in California, you can use CoveredCA.com to see if you qualify for Medi-Cal.

As of Jan. 1, 2024, adults in California ages 26 through 49 can qualify for Medi-Cal regardless of their immigration status.

You cannot buy a plan through Covered California if you have Medicare. You also can’t buy Medicare Advantage or Medicare Supplement plans through Covered California.

History of Covered California

In 2010, the federal Patient Protection and Affordable Care Act (ACA), also known as “Obamacare,” created a series of health care protections and rights, including the ability for states to create their own health insurance marketplaces. California was the first in the nation to offer its own health insurance marketplace, by creating Covered California.

Covered California appears to be a success. Those who were uninsured for a year or more dropped from almost 13% in 2015 to 4.5% in 2022, according to data released in late 2023.

How to Get Covered California

You can compare plans and insurance pricing, then buy online at CoveredCA.com. Or you can get help from a licensed insurance agent or certified enrollment counselor in person or by calling 800-300-1506.

The online application process takes about an hour. You can choose to pay online after choosing a plan, or get billed by the insurer after it receives your application. Your insurance card is mailed to you.

Note

If you qualify for Medi-Cal but apply through Covered California, your information will be sent to your local county offices for enrollment.

When Is Covered California Open Enrollment?

Open enrollment for Covered California runs from Nov. 1 through Jan. 31. You could qualify for special enrollment if you miss this period and experience a major, qualifying life event—including marriage, job loss, or adopting a child.

What Is the Difference Between Medi-Cal and Covered California?

Medi-Cal provides low-income Californians—including those not in California legally—free or low-cost healthcare coverage. It’s California’s version of Medicaid. Covered California may offer financial help through tax credits to help pay your premium and assistance with other out-of-pocket costs. But you must be a legal resident to sign up for Covered California.

What Is the Minimum Income for Covered California in 2024?

There’s no minimum or maximum income requirement to enroll in a Covered California plan. Eligibility for federal subsidies through the Affordable Care Act is based on the Federal Poverty Level. Those with an income of 138% FPL and lower are eligible for Medi-Cal in California.

The Bottom Line

Applying for health insurance through Covered California can help you get affordable coverage for yourself and your family. This health insurance protects against a personal financial crisis resulting from unexpected medical bills.

Covered California insurance plans also offer preventive care to keep you and your family healthy now and long into the future. Investigate options to discover a plan that fits your budget and lifestyle while benefiting from any insurance discounts that might apply if you qualify.

1. Covered California. "Dates and Deadlines."
2. Covered California. "When Will My Coverage Start?"
3. Covered California. "Qualifying Life Events."
4. Covered California. “What Is Covered California?”
5. Covered California. "Covered California's Health Plans and Rates."
6. Covered California. "Penalty."
7. Covered California. "Exemptions."
8. Covered California. "General Hardship Exemption."
9. Covered California. "Affordability Hardship Exemption."
10. Covered California. "Religious Conscience Exemption."
11. Covered California. "Get Started."
12. Covered California. "Covered California Plans and Rates for 2024."
13. Covered California. "2024 Patient-Centered Benefit Designs."
14. Covered California. "Covered California Bronze."
15. Covered California. "Covered California to Launch State-Enhanced Cost-Sharing Reduction Program."
16. Covered California. "Minimum Coverage Plans."
17. Covered California. "Information for Immigrants."
18. Covered California. “California Achieves Lowest Uninsured Rate Ever in 2022.”
19. Covered California. "Program Eligibility by Federal Poverty Level 2024."

Medicare Supplement open enrollment only happens once, according to federal guidelines. Don’t miss out on your chance to buy a Medigap plan.

Medicare Advantage open enrollment happens every year from January 1 through March 31. Use the time before open enrollment begins to research and compare your options.

Medicare Supplement Plan F is a well-liked Medigap plan, but it’s not for new-to-Medicare recipients. Find out more about what it is and how it works.

A special needs child is one that requires extensive medical, educational, or emotional support. Learn about tax deductions, credits, and other financial resources that can help.

California FAIR Plan insurance supplies coverage to homeowners and business owners who don’t qualify for traditional property insurance.

A Health Savings Account (HSA) is an account for individuals with high-deductible health plans to save for medical expenses that those plans do not cover.

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