I’m really frustrated with California’s health insurance rules. What do you do if you’re $60K in credit card debt and can’t afford monthly insurance payments?
I lost my job more than three months ago, and I just started a new one three weeks ago. It doesn’t offer insurance benefits, and buying a plan on my own is way too expensive.
So my choices seem to be:
Put myself in even more debt to afford health insurance just to avoid the penalty.
Skip insurance and take the tax penalty next year.
I’m working hard to pay off my debt, but the more I make, the more taxes take from me, and I don’t qualify for any assistance. It just feels like I’m stuck.
For context, I’m 37, and before I lost my old job (where I made about $70K), I had benefits. Now I work on-call at a hospital, and my hours change weekly. I live in Contra Costa County, CA.
If you’re healthy, you could get the lowest-cost plan with a high deductible just to have coverage in case of an emergency. I’ve seen people end up with six-figure medical bills because they waited too long to get insurance. It’s better to have some kind of safety net.
Have you thought about filing for bankruptcy? It would wipe out the $60K in debt, and you might qualify for a hardship exemption through Covered California.
Wilder said:
Have you thought about filing for bankruptcy? It would wipe out the $60K in debt, and you might qualify for a hardship exemption through Covered California.
I’ve considered it, but I really want to avoid bankruptcy if I can.
Are you guaranteed at least 30 hours a month at your new job?
If not, you might be considered part-time, which could affect whether your employer’s plan meets affordability requirements under Covered California.
The tax penalty for not having insurance is either $900 or the cost of the cheapest Bronze plan on Covered CA. Based on your income, that would be about $1,211 for a full year without coverage. You can check your estimated penalty here:
Most of the replies here are condescending and not helpful. California’s system really puts people in tough spots, and it’s frustrating. Sorry you’re dealing with this.
The penalty system is really unfair. I have insurance through my job, but my husband doesn’t because his small business doesn’t offer it. Since our combined income is high, we get hit with the maximum penalty for him not having coverage.
His cheapest Covered California plan would be about $500/month, which is unaffordable for us. So we end up paying a $3,000 penalty every year, and he still has no insurance.
California really needs to fix this system because it’s not helping people who are stuck in the middle.