Kevin Knauss: Health, History, Travel, Insurance
Posts related to the Covered California application, consumer account, estimating income, household size, monthly subsidies, health plans, Medi-Cal, and terminations.
Another alternative is the Bronze HDHP. While the monthly premium is essentially the same as the Bronze 60 at $231 a month, the MOOP is much lower at $7,200. When we total the annual premiums plus the MOOP, the Bronze HDHP saves this consumer $4,808 or 32.5 percent over the Silver 70 health plan.
Unfortunately, the IRS has not issued any guidance for the 2026 tax year with respect to expanded definition of health plans eligible for a Health Savings Account. The language clearly states that the health plan must be purchased through a Marketplace Exchange like Covered California. That would seem to preclude Bronze 60 and Minimum Coverage plans bought off-exchange, direct from the insurance company, as being eligible for the HSA contribution deduction.
The Bronze 60 plan may be a good option for people who are looking to save money and do not use health care services on a regular basis. The Bronze 60 has unlimited office and urgent care visits at $60. You get three specialist visits at $95. Lab tests are unlimited at $50. All other health care services are subject to the medical deductible of $5,800. The Bronze 60 has a maximum out-of-pocket amount of $9,800.
New for 2026 is an orange band on top of the table. This is the income range that California will provide additional subsidy to help lower health insurance premiums for low income families and individuals. The extra subsidy will be provided to incomes up to 165 percent of the federal poverty level. There is a new 165% column indicating the maximum annual income that the subsidy is eligible for.
If the enhanced subsidy lapses, and Covered California must return to the pre-2021 subsidy curve, the consumer responsibility for health insurance increases. For the individual estimating $50,000, based on 2025 federal poverty level, they are still 343 percent FPL, but the consumer responsibility percentage increases from 7.08 percent to 9.78 percent*. (*Consumer Responsibility from IRS 2020 form 8962 instructions.)
The main takeaway is that the calculations for the ACA health insurance income estimates are separate from determining the tax on Social Security benefits. Specifically, all the Social Security income is included on the Covered California application as income, but only ½ is used for the combined income calculation of Social Security income taxes.
The underlying rational for the new rules is that CMS perceives consumers to be cheating the system. With no evidence presented, CMS believes that consumers are receiving subsidies and health insurance they are not entitled to. They accuse individuals, families, and agents of committing fraud. Again, they present no evidence to support their supposition. The focus of CMS is to save money and if people are denied health insurance and health care, that is simply collateral damage to achieving the goal of less federal expenditures. The new rules are meant to save money and help the health insurance companies.
The Covered California application has been updated to better recognize and process documents related to confirming the identity of the applicant. With just the information on the application (name, address, date of birth, and social security number) the system can now quickly verify the applicant. Covered California has done away with the identity proofing questions.
Once your application for health insurance is approved by Covered California, the clock starts ticking on the Reasonable Opportunity Period (ROP) of 95-days to submit any proof or verification requests from Covered California. If they do request verification for conditional elements such as income, immigration, or minimum essential coverage, they will send you a letter.
Covered California has estimated that 112,000 individuals will lose the health insurance subsidy under the proposed Republican budget reconciliation bill now under consideration in Congress. Language in the bill would prevent lawfully permanent residents in close to 40 categories from receiving the Advance Premium Tax Credit subsidy to lower health insurance premiums. Republican bill to […]
