Why CA families are getting a tax surprise for health care

For families seeking affordable health insurance, the state’s health insurance marketplace, Covered California, can provide major relief. But if they’re not careful, they can get hit by an unexpected federal tax bill.

As CalMatters health reporter Ana B. Ibarra explains, enrollees can sometimes unknowingly receive too much aid if they underestimate their income the following year, or if they fail to report that they lost a dependent. This “excess” aid is connected to the federal Affordable Care Act, and is collected by the federal government when people file their taxes. 

In 2021, about 415,000 California households owed the Internal Revenue Service close to $690 million in charges related to the Covered California subsidies, or an average of $1,662 per person or family. About half of these households in 2021 earned less than $50,000.

So how do you avoid paying this tax bill? First, declare changes in income and dependents to Covered California or an enrollment counselor as soon as possible. Report all taxable income, including any extras, such as salary bonuses. And to remain really up-to-date, find an insurance agent and check in with them every so often. They often provide services for free, since agents get commissions from insurance companies.

If you’re thinking about skipping out on health insurance altogether than owe the IRS, keep in mind that California requires residents to have coverage, and you could still end up paying a penalty. And remember: The repayment process works the other way around too. If you overestimate your income and receive less subsidies than you’re eligible for, you could get money back.

For more on repaying health care subsidies, read Ana’s story.

Speaking of health care challenges in California: A significant number of homeless individuals on the street have mental health issues. There’s a new tactic becoming more common — shots to prevent psychotic episodes, writes CalMatters homelessness reporter Marisa Kendall.

These antipsychotics, which can ease symptoms for a month or longer, are administered by street medicine teams wherever patients reside. Unlike oral pills, the medication can’t be lost or stolen off an unhoused resident, nor does it require a pharmacy refill.

Treatment is voluntary and doctors say the goal of administering these shots is to get someone living in an encampment to begin thinking clearly, so they can engage with social workers, sign up for benefits and get on housing waitlists.

There are some side effects, such as dizziness and decreased mobility, which can be severely dire for someone living on the street. For doctors, their main challenge is following up with patients who can be difficult to track. Some wary patients also don’t want the shots.

But for others, such as Ricardo Fonseca Jr., the medication can be a godsend. Before becoming homeless, he worked as a welder. After a sudden mental breakdown, he started hearing voices. Two months ago, Fonseca started taking a monthly shot of an antipsychotic drug.

Fonseca: “Everything’s changed … I can finally hear the birds and the crickets. I couldn’t hear them before.”

Read more about the antipsychotic treatment in Marisa’s story.

By the time Dave Cortese joined the state Senate in 2020, he had a background in education, housing and business. But he also had 20 years of experience in transportation — including at the Metropolitan Transportation Commission and the Valley Transportation Authority.

Still, transportation wasn’t exactly a calling. So when Senate Pro Tem Mike McGuire appointed the Campbell Democrat as chairperson of the committee in February, Cortese said he faced a push-pull of sorts. On one hand, he was well-prepared. But also: “I’m never going to shake transportation. It stuck with me, and I’m stuck with it, evidently.”

But the post gives him power. Just last week, two fellow senators pulled a Bay Area transit funding bill that Cortese calls “kind of a mess.” I sat down with Cortese to discuss his role. The interview has been shortened for clarity and length.

How do you wish to steer the transportation committee?

The reality of a transit-dependent population became very evident to me over the years. When it comes to our transportation systems, we just have so much more work to do.

Don’t we just need more infrastructure? There’s projects out there in Northern California that have been latent for years.

Your Senate Bill 915 to allow local jurisdictions to regulate commercial autonomous vehicles was amended to prohibit cities from banning AVs altogether. Walk me through this amendment and your concerns about robotaxis.

I never really had any intention of running a bill that would ban autonomous vehicles.

People have mistaken the Teamsters’ (one of the bill’s sponsors) intentions a little bit as, “We just want all cars to have drivers because we’re in the business of unionizing drivers.” But they also have a lot of drivers on the road driving UPS trucks, big rigs. They have a genuine safety concern, just like the rest of the general public.

An Assembly bill now in the Senate would put limitations on self-driving trucks, such as requiring a backup human driver inside. Gov. Gavin Newsom vetoed it last year, calling it “unnecessary.” Would you agree?

We need to figure out how to deal with it, make sure it’s safe for everyone. I drive over Highway 152, from Santa Clara County. You have to drive over a two-lane highway called Pacheco Pass, also known as Blood Alley. There’s all kinds of accidents. Every time I drive that route, I think if one of those (vehicles) was autonomous, and we’re only about six feet apart, with no center divider and something went wrong, if it’s a loaded vehicle, it’s 80,000 pounds. 

The Legislature’s full of stories of something bad happened, and then all of a sudden everybody got religion and a bunch of bills got issued. But if something bad happens with 80,000-pound autonomous trucks, it’s going to be super tragic. We just shouldn’t be waiting around.

Meet more key lawmakers: Read my interviews with new Senate committee chairpersons: Catherine Blakespear at elections, Anna Caballero at appropriations and Lola Smallwood-Cuevas at labor. And Assembly committee chairpersons: Kevin McCarty at public safety, Chris Ward at housing committee and Alex Lee at human services.

Mexico elected a new president — a big deal for California on multiple levels.

High on the to-do list for Claudia Sheinbaum, a climate scientist who earned a master’s degree from UC Berkeley, is to agree with President Joe Biden on a border strategy. And that is going to be complicated, on both sides.

CalMatters’ Wendy Fry reports that the San Diego mayor’s office confirmed Monday that the White House invited Mayor Todd Gloria to Washington, D.C., today. But he won’t be among the border city mayors, including those from Texas and Arizona, who will attend an anticipated announcement of new restrictions for asylum seekers. 

Biden is expected to sign an executive order today allowing him to temporarily seal the U.S.-Mexico border when the number of migrants crossing irregularly between ports of entry reaches a certain daily number, according to the Associated Press. The anticipated action mirrors a 2018 effort by former President Donald Trump — ultimately blocked by federal courts — to immediately return migrants across the border or deport them without processing their asylum claims under an executive authority known as 212(f). 

Biden is facing mounting political pressure to address surges in irregular and illegal migration, among voters’ top concerns ahead of the presidential elections later this year. A White House spokesperson declined to comment to CalMatters. 

According to data from Customs and Border Protection, San Diego County became the top region for migrant arrivals in April and much of May. Gloria plans on responding to the details of the executive order as soon as they are officially announced, a spokesperson said.

One San Diego area mayor was unhappy about not being invited to the White House. El Cajon Mayor Bill Wells issued a statement saying he should have been included. 

Wells: “The exclusion of critical voices like mine proves this is all about optics and not about solving the problem.” 

Calexico’s mayor also said he was not invited. 

History made: Gov. Newsom didn’t specifically mention border issues in his congratulatory message to Mexico’s first female president, but he did note her “historic achievement (that) sends a powerful and inspiring message to women and girls in Mexico and throughout the world.” So did First Partner Jennifer Siebel Newsom, who called Sheinbaum’s victory “a historic win for women everywhere.”

It’s another reminder that California has never had a female governor in its 174-year history. That could change in 2026. Three high-profile Democratic women are already running: Lt. Gov. Eleni Kounalakis, state Sen. Toni Atkins and former state Treasurer Betty Yee.

The first major wildfire of the season is still burning near Tracy, after forcing evacuations and closing Interstate 580 over the weekend. As of Monday, the Corral Fire was at 14,000 acres and 75% contained and still under investigation, according to Cal Fire. CalMatters has a wildfire tracker that includes live updates on active fires, a FAQ and other information.