Fear of penalty a reason for Obamacare’s late surge in California

Aline Mijaneos waits with her 3-month-old daughter, Scarlett Valdez, for her turn to meet with an enrollment counselor about Obamacare at the offices of SEIU-United Healthcare Workers West in the City of Commerce.
(Al Seib / Los Angeles Times)

California officials often cited the high demand for health insurance in explaining this week’s last-minute surge for Obamacare.

But some of the people who waited in line for hours this week said another big reason was to avoid paying the health law’s penalty for being uninsured.

Chris Roca, 23, waited in line for more than three hours to enroll in a health plan at a sign-up event in Panorama City. But he said he doesn’t expect he’ll get much use from his insurance.


“I’m just happy I don’t have to pay the penalty,” Roca said.

The Affordable Care Act requires most Americans to have health insurance in 2014, or pay a penalty of $95 per adult or 1% of their adjusted gross income, whichever is greater. Those penalties increase in future years.

Full coverage: Obamacare rolls out

Monday was the last official day for open enrollment. But California granted an extension until April 15 for people who started their applications before the deadline or ran into technical difficulties as the state website faltered late.

Overall, more than 1.2 million people have enrolled in health plans through the Covered California insurance exchange. An additional 1.5 million Californians are likely to be eligible for Medi-Cal, the state’s version of Medicaid.

Nationwide, sign-ups on the new online marketplaces have surpassed the Obama administration’s goal of 7 million. Thus far, about 85% of customers have paid their initial premium, so the final enrollment tally may be slightly lower.

In its advertising, Covered California often played up the benefits of Obamacare, such as guaranteed coverage regardless of pre-existing conditions and access to checkups and mammograms.

There was very little talk about the penalties until the enrollment deadline got closer.

Peter Lee, executive director of Covered California, attributed the strong turnout ahead of the deadline largely to residents wanting the peace of mind that comes from having comprehensive health insurance at an affordable price. Federal premium subsidies lowered the rates substantially for many enrollees.

“We saw an enormous surge of applicants during the final week of March,” Lee said Thursday after testifying about the state’s performance at a congressional hearing in Washington. “This shows how strong the demand is from Californians wanting and needing quality coverage.”

College student Hector Escobar showed up at the Cal State L.A. campus during spring break last week just to get Obamacare coverage.

Escobar, who lives in Downey, didn’t know about the approaching deadline, but he had heard about the penalty.

“I didn’t want to pay the $90-something for the next year,” he said.


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