On Governor Newsom’s first day in office, Newsom proposed reinstating the tax penalty for not having Affordable Care Act-compliant, comprehensive health insurance coverage. The proposal is in response to the recent removal of the federal tax penalty for not having health insurance which recently went into effect in 2019. We have already seen several other states such as New Jersey and Massachusets have their own statewide tax penalties for not having comprehensive coverage.
A big concern for both health insurers and the state legislature is that the health insurance risk pools will become too concentrated with the sick, higher cost members as healthy individuals move away from comprehensive health insurance towards short-term medical, accidental, critical illness and health ministry plans that are not considered health insurance. California already banned the sale of short-term medical insurance in 2019 to prevent an outflow of healthy insurance members to help stabilize the risk pools. Now, with a proposed state-wide tax penalty, California’s legislature hopes to further prevent outflows from comprehensive coverage while using the tax revenue to subsidize health insurance premiums for lower income individuals/families.
The tax penalty would subsidize individuals earning up to $72,480 annually or for families of 4 making under $150,600 per year. This would be great news to many of our clients who earn too much to be eligible for current subsidies but are not earning enough to comfortably afford their health insurance. In California, health insurance premiums have increased by 50% over the last 5 years, hitting the middle class the hardest.
At Solid Health Insurance Services, we will always strive to keep our clients informed on the latest healthcare trends and legislation. We will continue to keep you up-to-date on the status of Governor Newsom’s health insurance mandate proposal. As the 2019 Open Enrollment Period January 15th deadline to enroll approaches, please make sure to contact us if you would like to make any final changes to your 2019 health insurance for a February 1st effective date.
Our mission is to find for you affordable health insurance, life insurance, long-term care insurance and travel insurance which fits your medical needs and budget for your individual, family and business needs. Please contact us at 310-909-6135 or at email@example.com.