Balancing the Books: How Affordable Is Health Insurance Through Covered California When Local Cost of Living Is Taken Into Account?

Laurel Lucia, UC Berkeley Center for Labor Research and Education

A county-by-county analysis shows what a typical household needs to earn to cover basic living expenses as well as health insurance through Covered California.

June 2016
A man and a woman lying on a wooden floor looking at a laptop. Papers are scattered on the floor around them.

Subsidies offered through the health insurance marketplaces established under the Affordable Care Act (ACA) have reduced the cost of health insurance for millions of Californians. Subsidy amounts, however, are set nationally and do not take into account the local cost of living, which varies dramatically across the state.

Even with the help of subsidies, many Californians struggle to afford coverage through Covered California, the state's health insurance marketplace, especially those living in areas where a high cost of living already strains household budgets.

In this analysis, researchers identified an affordability threshold — the minimum amount a typical household would need to earn to have sufficient funds to cover their basic needs and Covered California premiums and out-of-pocket costs after federal subsidies.

The affordability threshold varied widely by county, mostly due to the local cost of living, but in every county it fell above the maximum income to qualify for Medi-Cal as an adult (138% of the federal poverty level, $33,543 for a family of four or $16,395 for one person). This suggests that in every California county, there are families and individuals — specifically those earning above 138% of FPL and below the local affordability threshold — who are falling into an affordability gap. They earn too much for Medi-Cal but not enough to afford health insurance through Covered California, even with subsidies.

See what the affordability threshold is in your county — for a family of four and for one person — using the interactive map below. The full issue brief is available as a Document Download.


The affordability threshold was determined by calculating the income level at which annual income exceeded estimated expenses, including housing, child care, transportation, food, taxes, miscellaneous expenses, and health care premiums and out-of-pocket costs. Researchers assumed low medical use by all family members. Health costs would be higher for consumers who are frequent users of medical services.

What Can Cities and Counties Do to Help?

Subsidy levels are set by federal law. States can provide additional funding to reduce consumers' costs on state-run health insurance marketplaces. But in the absence of federal or state action, cities and counties may still be able to help by providing extra support to those falling into the affordability gap.