Today, let's take a closer look at the Covered California 2027 state subsidy! Open enrollment started on November 1, and there are some important changes to note this time.

To get straight to the point, the California state government has expanded the eligibility for the State Premium Subsidy to 200% of the federal poverty level (FPL) starting in 2027.

In 2026, this state subsidy was cut off at 165% of the FPL. So, with this expansion, people in that income range will now receive new benefits.

To put it in perspective, according to Covered California, 200% of the FPL is an annual income of $31,920 for a single-person household and $66,000 for a four-person household.

That level of income is quite common around us. Many small business owners, part-time workers, and those who have reduced their work hours just before retirement fall into this category.

Let's look at how things are changing specifically. For those below 150% of the FPL, the percentage of income they need to pay for the benchmark plan (the benchmark silver plan) will remain at 0%.

And for those between 150% and 200%, they will pay 1.5 percentage points lower than the federal standard. You can think of it as the state providing an additional layer of support on top of the federal subsidy.

The budget has also increased significantly. The funding for the state subsidy has grown from $190 million to $300 million, with an additional $110 million added in the May revised budget, which forms the basis for this expansion.

Covered California expects that over 500,000 enrollees will receive state subsidies in 2027. This accounts for about 30% of all enrollees, which is certainly not a small number.

Additionally, it is estimated that 200,000 people who were previously ineligible will receive help, and 90,000 who were about to drop their insurance will be able to maintain their coverage.

But why has the state suddenly stepped in like this? You might not realize how important this is!

The federal enhanced subsidy, which had been extended since the pandemic, is set to end at the end of 2025. As a result, many people have seen their insurance costs rise significantly starting in 2026.

Moreover, insurance premiums will also increase in 2027. The weighted average increase rate announced by Covered California in July was 9.9%.

Honestly, seeing that number made me sigh. With federal support decreasing and premiums rising, the state subsidy is essentially acting as a buffer.

However, there are clear limitations. The state subsidy only goes up to 200%, so if your income is just slightly higher, you won't receive the direct benefits of this expansion.

So, the first step is to check what percentage bracket your income falls into. You can enter your zip code and estimated income into the Shop and Compare tool on the Covered California website, and it will calculate it for you.

Remember this! The reference is not last year's income but your estimated income for 2027.

If you underestimate your income, you may have to pay back some of the subsidy during tax reporting. Conversely, if you overestimate, you might miss out on benefits.

If you are already enrolled, don't just rely on automatic renewal. If your income or family size has changed, you need to log into your account and update your information.

For reference, you don't need to apply separately for the state subsidy. When you enroll in Covered California and provide your income information, it will be automatically calculated along with the federal subsidy.

Open enrollment runs from November 1 to January 31. To receive coverage starting January 1, you need to complete your enrollment by December 31, so be sure to check the exact dates on the Covered California website.

If you find English documents overwhelming, you can get help from a Certified Enroller for free. You can also find places that offer consultations in Korean on the website.

Especially for those between 150% and 200% of the FPL, if you choose a silver plan, you can also receive cost-sharing reductions that lower your out-of-pocket expenses, so be sure to compare it with bronze plans.

And when choosing a plan, don't just look at the premiums. It's a good idea to check with your doctor or pharmacist to see if your hospital and doctors are in-network and if your medications are covered.

Politically, opinions are divided on this expansion. Some say it's a natural measure for the state to protect low-income individuals in the face of federal support being cut off.

Others question whether it's sustainable to keep increasing the amount every year when the state budget isn't robust. There are also calls for structural reforms to lower premiums themselves.

Here's my take. Both sides have valid points, but if there are families contemplating dropping their insurance, I believe they need support right now.

However, the instability of changing criteria based on the budget each year is definitely a challenge that needs to be addressed. We don't know how things will change next year.

So, this year, make sure to run the calculations yourself. Even if you thought you weren't eligible for a subsidy last year, things may have changed this time, truly!

If I were you, I would open my account within this week. Investing just a few minutes could significantly change your insurance premiums for the year.