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Covered California Q&A

Covered California and Obamacare related questions from consumers, employers and agents are answered by Phil Daigle with the best information available at the time. Archived entries may no longer be accurate as the Covered California and Obamacare knowledge-base is evolving quickly. TO REQUEST A PERSONAL RESPONSE INCLUDE EMAIL ADDRESS.

Participation Fees

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Question: What happens if the federal grants to launch Covered California is not enough? Will California taxpayers have to foot the bill?

Answer: The Covered California health insurance marketplace is required to be self-sufficient without federal or state money by 2015. In fact, the state law establishing the Covered California expressly prohibits using state funds. Covered California’s continuing funding will come from participation fees for all qualified health plan (QHP) issuers of 3% of premiums in the individual exchange and 4% of premiums in the SHOP exchange. QHP issuers will recover their participation fee costs from policyholders in the form of premium increases.

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I imagine you mean additional funds BEYOND the subsidies will not be needed. But the subsidies will still be provided by the federal government, not?

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