Californians warned: Get health coverage or pay rising penalties

SACRAMENTO, California — Rising penalties for not having health insurance should push Californians without coverage to explore their options and sign up to avoid a big bill at tax time next year, the state’s official health insurance marketplace announced.

“It’s important that consumers understand now that the cost of remaining uninsured is rising,” Covered California Executive Director Peter V. Lee said. “This year, a family of four earning $70,000 a year could pay close to $1,000 in their taxes if they remain uninsured in 2015.”

The penalty, known as the “shared responsibility payment,” takes effect for 2014, and many who were uninsured will see an impact when they prepare their taxes due in April of this year.

However, the penalty rises substantially for 2015, meaning it’s important that all uninsured Californians know this and take steps now — before open enrollment ends — to avoid significant penalties when they prepare their 2015 taxes due next year.

“With some exceptions, everyone in America is now required to have health insurance — buying coverage for themselves and their families rather than relying on others to pay for their care,” Lee said. “As the penalty increases, it makes more and more sense for those who have been waiting on the sidelines to get in and get coverage.”

In 2016, the shared responsibility payment for those without health insurance rises even more. The same family of four that would pay $988 for not being covered in 2015 would likely pay $2,085 in 2016 if they do not have health coverage, depending on their specific circumstances. Individuals and families with incomes that would qualify for Medi-Cal would also be affected if they don’t have coverage.

“This is an important message that should be heard by Californians of all income levels,” said Toby Douglas, director of the California Department of Health Care Services (DHCS), which operates the Medi-Cal program. “Applying for coverage not only gives you an opportunity to get comprehensive health care; it can help you avoid a penalty that could hurt you and your family.”