Health care for $1 a month? Covered California touts massive subsidies from COVID relief

Covered California — the state’s subsidized private health insurance program under the Affordable Care Act — is about to get a good deal cheaper.

Some Californians could wind up paying as little as $1 a month for coverage.

Armed with about $3 billion in fresh subsidies from the COVID-19 economic relief package signed by President Joe Biden, the state-run program will drop its rates beginning with May premium payments.

The lower rates will kick in automatically for the roughly 1.6 million Californians already enrolled in the system, said Covered California executive director Peter Lee. As the subsidies flow in, the state agency on Monday launched a marketing campaign to bring hundreds of thousands of additional Californians into the fold.

“This is a big deal,” Lee said in an interview. “You don’t want to leave money on the table; you want to get in the door. ... This is absolutely the biggest expansion of the Affordable Care Act since it was launched.”

The average Covered California customer now pays about $130 a month in premiums, although the figure varies widely based on household income and the type of plan they buy. Although the insurance is purchased through Covered California’s platform, customers are getting coverage through major carriers such as Kaiser Permanente and Western Health Advantage.

‘It’s essentially free — $1 a month for the vast majority’

Covered California’s rates are already subsidized to the tune of about $10 billion a year. The additional $3 billion from the recently enacted American Rescue Plan means that Californians who’ve “been spending $150 a month or $80 a month — they will see that what they need to spend out of pocket cut in half,” Lee said.

“If they’d rather get what we call a high-deductible plan, it’s essentially free — $1 a month for the vast majority.”

He said the subsidies will largely go to those who need it most. “These are mostly low-income families from the communities of color that have been hardest hit by the covid pandemic,” he said.

The enhanced Affordable Care Act subsidies, which will run through the end of 2022, will flow nationwide. In California, the extra cash piggybacks on a program signed into law two years ago by Gov. Gavin Newsom to reduce premiums. The new subsidies from Congress will save the state the $350 million-a-year it’s been spending on the program.

Existing customers of Covered California “won’t have to do a thing” to get the benefit of the additional subsidies, Lee said.

The state is starting a $20 million ad campaign, mainly targeting roughly 800,000 uninsured Californians who qualify for Covered California but haven’t felt they could afford it, Lee said. At the same time, participating health insurers will reach out to hundreds of thousands of Californians who pay for coverage individually but aren’t already part of Covered California. The marketing campaign also will encourage about 1 million uninsured Californians who are eligible for Medi-Cal to sign up.

This story was originally published April 12, 2021 at 10:00 AM with the headline "Health care for $1 a month? Covered California touts massive subsidies from COVID relief."