California Insurance Changes to Understand for 2022

Posted: December 10, 2021

Open enrollment in California lasts through January 31, 2022, for coverage in 2022. If you need a new health insurance plan or want to switch from one plan to another without having a major life change, open enrollment is the time to do it.

There are often some changes in health insurance options and costs from year to year and 2022 is no different. Take a look at what’s changing in California this year and what’s staying the same.

What Is Changing With California Health Insurance?

In 2022, you can expect to have more choices when it comes to health insurance plans. How much you pay for a policy and how much you get from a subsidy are also likely to change this year. Let’s look at the changes and how they might affect you.

Premiums and Subsidies

Your health insurance premium is how much you pay for coverage monthly. Insurance premiums are based on several factors, including your age, location and the type of insurance policy you buy. Whether you smoke or not also affects your premium. Tobacco users typically pay higher insurance premiums than non-smokers.

In 2022, premiums in California will increase by about 1.8% on average. For people who are shopping around and looking for a better health insurance plan, their premium could fall by 7.9%. The premium increase in California is unique, as premiums in the rest of the country are expected to fall by 3%.

Although premiums will go up in 2022, so will subsidies for many people. The increased subsidies are due to the American Rescue Plan (ARP), which passed in 2021, and the Build Back Better (BBB) plan. When the ARP first passed, it was estimated to help 135,000 Californians get covered for the first time. The ARP also gave 151,000 enrollees access to a subsidy for the first time.

The size of the subsidy you qualify for depends on your household income level. If you earn 150% or less than the federal poverty level for your household size, your premium can be just $1 per month. Above 150% of the federal poverty level, your premium is based on your income. If your income is twice the poverty level, you’ll pay 2% of your annual income toward premiums and can get a subsidy to cover the rest.

Insurance Options

When choosing a health insurance plan, you can pick from four “metal” categories that determine your premium and cost-sharing responsibilities. Bronze plans, for example, have lower monthly premiums but require you to pay more out-of-pocket should you need medical care. Gold and platinum plans have higher monthly premiums but have fewer out-of-pocket expenses for medical care.

Those options will stay the same for California health insurance in 2022. What will change is the number of carriers in California that offer health insurance. More carriers mean more choice and better odds at finding a plan that works for you. The state expects to have 12 carriers this year.

Some insurance carriers have expanded the size of their coverage footprint, moving into areas they didn’t serve previously. At least one carrier is completely new to the state.

The increase in careers means that every resident of California will have at least two choices for health insurance. Nearly 95% will have three options, and 81% will have four or more carriers to choose from.

With an increase in options also comes an increase in quality. Before 2022, more than 85% of residents enrolled in health insurance plans with quality ratings of three stars or higher. The state’s goal is to have everyone enrolled in a plan rated four or five stars. Califonia is launching a quality transformation initiative to address the need for high-quality health insurance.

Emergency Coverage

On January 1, 2022, the “No Surprises Act” went into effect. Previously, patients who needed emergency treatment at an out-of-network hospital or medical provider would have to pay for that coverage out-of-pocket. If their insurance plan did provide coverage, people could be subject to balance billing, meaning many ended up with surprise, high medical bills after receiving emergency care.

Thanks to the No Surprises Act, insurance plans need to cover emergency services at the in-network rate. If a patient goes to an out-of-network ER or sees an out-of-network physician while getting emergency treatment, they can’t be billed for more than their plan’s in-network cost-sharing amount.

Additionally, the law requires hospitals to give patients a good faith estimate of the cost of care and services, if requested.

The No Surprises Act applies to every state in the country,  not just California.

What’s Staying the Same for 2022

While there are many California health insurance changes in 2022, some things are staying the same.

Metal Categories

Health insurance plans will continue to be classified into four metal categories. They are:

• Bronze: Insurance covers 60% of health care costs, and the insured pays the rest.
• Silver: Insurance covers 70% of costs, and the insured pays the rest.
• Gold: Insurance covers 80% of costs, and the insured pays the rest.
• Platinum: Insurance covers 90% of costs, and the insured pays the rest.

Insurance Mandate

California will continue to have an individual insurance mandate, meaning that everyone, with few exemptions, needs health insurance coverage. People who don’t have coverage through an employer or family member will need to purchase their own policy or see if they are eligible for Medi-Cal, the state’s version of Medicaid.

The insurance mandate aims to increase the number of people who have insurance in the state by giving them a financial reason to buy a policy. If you decide not to purchase insurance and don’t qualify for an exemption, you’ll pay a tax penalty. The penalty starts at $850 per adult in a household. Depending on your income, you could pay per person or a percentage of your earnings, whichever is higher.

Shop Around to Get the Best Health Insurance Plan

Your current health insurance plan may automatically renew or re-enroll you for coverage in 2022. However, it might be in your best interest financially to shop around. A plan that worked for you last year might not meet your needs in 2022. You might find a plan that has lower premiums or that otherwise works better with your budget.

Also, consider any life changes you might have in 2022. If you plan on getting married, changing jobs or having children, that can change your insurance needs or make you eligible for a special enrollment period after open enrollment ends.

Enroll in a Health Insurance Plan Today

Health for California can help you choose the health insurance that’s right for you. Our agents are happy to answer any questions you have about health insurance plans and to help you choose a policy that covers your needs or helps you avoid a tax penalty. We can also help you see if you qualify for a subsidy this year. Get a quote today to learn more.