Common Pitfalls

In the past, some people found it impossible to find health coverage that was affordable and met their needs. Now, there should be an option for almost everybody, even if you have a disability. The exact health coverage that will be right for you will depend on things like your family’s income, whether you have access to employer-sponsored coverage, your age, where you live, and whether you have a disability.

If you have the option of employer-sponsored coverage or public health programs like Medicare or Medi-Cal, they are probably your best bet.

If you don’t, you will probably end up getting an individual plan through Covered California and the government may help you pay for that plan. Note: There is no income limit for getting subsidies that help pay individual coverage premiums. (Before 2021, the limit was 400% of FPG for federal subsidies and 600% of FPG for state subsidies.) To get subsidies, you still must meet other eligibility rules and the premium amount you pay depends on your income and your plan.

Note: If you do not have coverage, you may have to pay a tax penalty on your California taxes.

When making decisions about health care coverage and comparing different types of plans, make sure you understand all of the costs of a plan. These costs include:

• Premiums, a monthly amount that has to be paid whether or not you use medical services. If you have employer-sponsored coverage, your employer pays part or all of the premium and you pay whatever the employer doesn’t pay. If you have individual coverage, you pay the entire premium, though the government may help you pay through tax subsidies if your income is low enough.
• Copayments, a set amount you have to pay for a medical visit or service. The exact amount of the copayment depends on the service you get: medications, visits to specialists, lab tests, X-rays, emergency room visits, and other services can all have different copayment amounts.
• Co-insurance, a set percentage of the cost of a visit or service that you must pay.
• A deductible, a set amount of money that you pay out of your own pocket each year before the insurance company will begin to pay for certain services, including hospital care, emergency room visits, and brand-name prescription drugs. Once you have paid the deductible, you do not have to pay it again until the next calendar year.

If your employer, your parent’s employer, or your spouse’s employer offers you health insurance, in most cases it will be less expensive than if you were to buy an individual plan.

If your employer-sponsored health coverage is affordable and meets a certain benefits level, you won't qualify for government help through tax subsidies to pay for an individual plan on Covered California. That means that if you decide to purchase an individual health plan, you will have to pay the full price, which will likely be more than you would have paid had you used the coverage provided by your employer.

In some cases, a plan will be affordable for the employee, but it will not be affordable to cover the rest of their family. In this situation, it may be cheaper for those family members to buy individual plans through Covered California (and they may qualify for government subsidies). Learn more about affordability rules for family members and how it affects eligibility for tax credits on Covered California.

Note: Before 2023, the spouse or children of an employee would not qualify for subsidies on Covered California if the employer offered coverage that was affordable for the employee's policy alone, even if the cost to add the rest of the family wasn't affordable. This was called the "family glitch."

There may be situations where it makes more sense for different members of your family to get health coverage in different ways. Do not feel that just because one member of your family gets a certain plan, the entire family needs to get that plan.

For example, let’s say you work for a company that only offers health coverage for you and your children, but not your spouse. You could take the coverage for yourself and your spouse could get coverage on Covered California. Since your employer doesn’t offer coverage for your spouse, your spouse might even qualify to get government help paying for an individual plan through tax subsidies. If your income is low enough, your children could sign up for Medi-Cal, even if you and your spouse don’t qualify for it.

As you can see, in some situations it can make sense for a single family to get totally different types of coverage for different family members.

If you have public health coverage, in many cases it makes sense to also enroll in private health coverage. With private coverage, you may have a wider pool of doctors and other medical service providers to choose from than with public coverage. However, public coverage might pay for some services that many private plans don’t cover like transportation, private-duty nursing, and Personal Care Assistant (PCA) services.

Furthermore, if you have both at the same time, Medi-Cal may decide it is cost-effective for them to pay your portion of your employer-sponsored health insurance's premium. Read about the Medi-Cal Health Insurance Premium Payment (HIPP) program in DB101’s Medi-Cal article.