What is a coinsurance penalty?

Coinsurance penalty is a type of penalty that is issued to individuals or businesses who do not have the required amount of health insurance coverage in the state of California. It is much like a penalty for not having car insurance, however it applies to health care coverage. The penalty for failure to have health insurance coverage is calculated as follows: for each month you are uninsured, you will be fined the greater of either a set dollar amount per person or a percentage of your yearly income. This penalty is issued annually, and will remain in effect until you obtain coverage. When you are issued a coinsurance penalty, it means that you are charged more for medical services than an enrollee of a health plan. This penalty can range from a few hundred dollars to a few thousand dollars, depending on how long you have gone without insurance coverage. The coinsurance penalty is intended to incentivize individuals and businesses to obtain health insurance coverage. It is also meant to help offset the cost of providing medical services to those without insurance. By paying a coinsurance penalty, individuals and businesses help cover the cost of medical care which would be absorbed by taxpayers.

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