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Reasons You Should Consider Health Insurance Coverage, Covered California

Updated: Jun 16, 2022

Explore the many benefits of enrolling in a health plan — even if you are young, fit and healthy.

You might not be able to buy health and happiness, but enrolling in health insurance coverage can help. Research shows that people who stay covered have better health outcomes, pay less out-of-pocket for medical care, and are less likely to go bankrupt.

Explore a few more reasons why it’s a good idea for everyone to have a health plan, and learn about the laws and advantages that apply specifically to Californians.

1. Affordable health insurance is available for California residents.

Studies show that cost is the No. 1 reason people go uninsured. However, health insurance might not be as expensive as you think. That’s because there’s more financial help available than ever before.

In fact, 90 percent of Californians who sign up through Covered California receive financial help to lower the cost of insurance. Residents can benefit from additional federal assistance thanks to the American Rescue Plan. Some will even qualify for premiums as low as $0 per month. Plus, people across different income levels may be eligible for savings. No matter how much you make, you won’t pay more than 8.5 percent of your household income for a benchmark Silver plan.

Paying less does not mean getting less. When you sign up through Covered California, you can choose from brand name private health insurance plans. The government chips in, so you get quality health insurance at a discount. Use this interactive calculator to see how affordable health insurance can be and how much financial help you could get.

2. Health insurance helps protect you from life-altering medical expenses.

While it’s true that eating your vegetables, exercising, and getting enough sleep can help preserve your health, there’s no foolproof way to protect against accidents, illness, and injury — and the bills for uninsured individuals can be catastrophic. The amount a single person pays for health insurance coverage is a tiny fraction of what emergency care can cost out-of-pocket.

If you don’t have health insurance, fixing a broken leg will run you about $7,500 in medical expenses; a torn rotator cuff adds up to more than $50,000; and comprehensive cancer care can cost in the hundreds of thousands of dollars. Covered California consumer data shows that for insured individuals, insurance picks up 90 to 95 percent of the bill for emergency care and hospitalizations. No one plans to get into a car accident when they drive to the supermarket, but life happens. Just like you protect your vehicle with car insurance, it’s important to protect yourself with health insurance.

People without health insurance are more likely to have medical debt they can’t afford to pay. Medical debt often creates even more problems like credit card debt, difficulty paying for necessities, drained savings, and having bills go into collections, dragging down your credit score. According to a 2019 study, two out of three people who file for bankruptcy say that medical bills were a contributing factor.

3. Health care keeps you healthy and well.

In addition to protecting against the cost of medical emergencies, health insurance works to keep you healthy. Studies show that people with insurance live longer and have better health outcomes in the long term.

Preventive care is key to protecting your well-being — and it’s free when you have health insurance. According to the Affordable Care Act, all plans purchased through Covered California must provide a number of preventive services without charging an additional copay or coinsurance (even if you haven’t paid off your health insurance deductible). Free services include basic vaccinations, counseling for sexually transmitted infection (STI), and screenings, including blood pressure, cholesterol, depression, alcohol misuse, and many more. Women can also receive birth control, breastfeeding support, and well-woman visits.

Screenings and preventive medicine help you stay on top of your health and identify issues early so you can get the care you need. Adults who are uninsured are more than four times likelier to receive no preventive care and have a greater risk of experiencing late-stage illness. One study found that uninsured women with breast cancer have a 49 percent higher risk of death than women who were insured.

4. Having health insurance is required by law.

Getting covered isn’t just good for your health — in California, it’s the law. The state’s individual mandate went into effect in 2020, requiring all adults and their dependents to enroll in health insurance. The purpose of the law is to increase the total number of Californians with health insurance in an effort to decrease the average cost of premiums. By ensuring that a large, diverse pool of healthy people pay into the system, the sickest, most in-need individuals can receive necessary care without making costs go out of control for everyone.

If you choose to go without health insurance, you will face a penalty come tax time (unless you qualify for an exemption). Each year, the penalty amount is adjusted for inflation. Penalties can be in the hundreds or even thousands of dollars, taking into account every adult and child in your household who goes uninsured. For tax year 2021, a family of four with a total household income of $75,000 would pay at least $2,400 in penalties for a full year without insurance. You can see what your tax penalty may be here.

5. You will pay less for medical care — even before you meet your health insurance deductible.

Depending on the health plan you choose, you may have a deductible. This is the amount you pay out of pocket before your insurance company starts to contribute. In general, plans with higher monthly premiums have lower (or no) deductibles and plans with lower-cost monthly premiums have higher deductibles.

What you might not know is that when you have health insurance, you will save money even for out-of-pocket costs before you reach your health insurance deductible. Most preventive care is free, and people with health insurance on average pay 50 percent less for other medical services. Insurance companies negotiate with providers to get better rates, which means more money in your pocket. A 2019 survey found that nonelderly adults without health insurance were two times more likely to struggle to pay medical bills than people who were covered.

Find a plan that’s right for you.

Don’t wait to get coverage! Covered California’s open enrollment period happens between November and January. If you don’t sign up during open enrollment, you may still be able to apply for health insurance and financial help through Covered California under special enrollment. If you have questions or need assistance, free expert help is available.

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