How to get help paying for health insurance

Having trouble providing health insurance? You are not alone.

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Health insurance can be so expensive that many low- and middle-income people cannot afford it without help. Most non-retired Americans receive health insurance from their employer, and employers heavily subsidize the cost. Most older American retirees are covered by Medicare, which is also heavily subsidized. Fortunately, there is also financial help for people who need to purchase their own insurance.

The Affordable Care Act (ACA) created government subsidies to help low- and middle-income people pay for health insurance. These grants help pay for your monthly health insurance premiums , as well as costs like coinsurance , copays , and deductibles if you have health insurance.

And the American Rescue Plan increased premium subsidies and made them more affordable for 2021 and 2022, making health insurance even more affordable for millions of Americans.

What financial assistance can I get?

There are three different programs for people who need help paying for their health insurance.

  • Medicaid – The first program, if you have a very low income, will enroll you in Medicaid . Most of the time, Medicaid is provided free of charge to those who qualify. Eligibility varies from state to state, so you won't know for sure if you qualify until you apply. Most states have expanded Medicaid eligibility under the ACA, so even if you applied earlier and were denied, you must apply again through your state 's health insurance exchange . (You will learn more about this later.) The Medicaid website has the latest Medicaid and CHIP income limits, state by state. (CHIP is available for children and sometimes pregnant women, and the income limits are higher than Medicaid .) The ACA has canceled the asset tests to determine Medicaid eligibility for adults under age 65, so eligibility is based on income rather than total income and assets (asset tests are still used for individuals under the age of 65). 65 years or older).
  • Tax credits: The second program, which is also based on income, pays a portion of your monthly health insurance premiums. ( this is how income is calculated for this ). It's like getting a discount on the cost of health insurance because the subsidy covers some of your costs (or , in some cases, the full cost ). This subsidy is channeled by the government directly to your health insurance company on your behalf each month, or you can pay the full cost of the plan when you make the switch and then claim the premium tax credit on your tax return.
    While premium subsidies make health insurance much more affordable, unlike the Medicaid option described above, you will probably still have to pay something for the cost of your health insurance each month (note that some states charge modest premiums to Medicaid members with incomes above the poverty level). line).
    Eligibility for a premium tax credit depends on income; assets are not taken into account . Premium tax credits are based on the retained value after subsidizing the second-highest silver plan, but can be applied to any metal-level plan.
    Generally, there is an income limit (equal to 400% of the poverty line) to be eligible for the premium subsidy. But for 2021 and 2022, the American Rescue Plan removed that limitation . Households earning more than 400% of the poverty level may qualify for the premium subsidy if the cost of the control plan would otherwise be more than 8.5% of the household income.
  • Cost Sharing Reduction: For people with relatively low or modest incomes, the third program reduces your out-of-pocket expenses, such as deductibles, copays, and coinsurance, when you use your health insurance. This benefit is available to people whose income is 2.5 times the poverty level.
    For example, if you purchased a health insurance policy that would otherwise require you to pay a $ 50 copay each time you see a doctor, your cost-sharing subsidy can lower that copay by up to $ 30 each time you see a doctor. The cost reduction program also limits the maximum cash you will pay if you end up using your health insurance frequently. Because the insurance company pays a higher percentage of your health care costs, the cost-sharing subsidy is like a free upgrade to your level of health insurance.
    Cost-sharing subsidies are only available for Silver plans and are automatically included in all available Silver plans if your income qualifies you for them. For those who are not eligible, plans that include cost-sharing subsidies are not listed in the available options .

Many low-income people benefit from both a tax premium subsidy and a reduced cost-sharing subsidy, as long as they enroll in the Silver plan. People who are eligible for a cost-sharing subsidy will almost always be eligible for a premium subsidy as well. But not everyone who qualifies for a premium subsidy is eligible for a cost-sharing subsidy.

In 2021, just under half of all people who participated in plans through exchanges received co-financing grants. Almost all of them also received premium subsidies. But many more people – 86% of those enrolled – received premium subsidies.

How can I get help paying for health insurance?

You can apply for Medicaid and Health Insurance Subsidy through your state health insurance exchange . When you apply for health insurance through your health insurance exchange, the exchange will determine if you are eligible for Medicaid or a lower cost sharing and / or tax credit.

Can I qualify for help paying for health insurance?

Eligibility for a health insurance subsidy depends on your federal poverty income. The amount of poverty in federal dollars changes each year and depends on the number of people in your household. As explained here , the exchange will use the poverty figures from the previous year to determine your eligibility for the subsidy (thus the 2020 poverty figures are used for effective health plans in 2021).

The lowest threshold of eligibility for premium subsidies is household income equal to 100% of the poverty rate in states that did not expand Medicaid, and more than 138% of the poverty rate in states that expanded Medicaid (which is most states). ). In states that have expanded Medicaid, adults under 65 are eligible for Medicaid if their income does not exceed 138% of the poverty line. To cover 2021, the 100% poverty rate for a single person in the Continental US is $ 12,760.

Generally, there is an upper threshold for eligibility for the premium subsidy, which is 400% of the poverty line. But the American Rescue Plan eliminated that for 2021 and 2022. Depending on how much a person has to pay for a control plan, subsidies may be available for income well above 400% of the poverty line. Consumer advocates have called on Congress to extend the subsidy provisions in the American Rescue Plan, but if that doesn't happen, there will again be a 400% subsidy cut from the poverty line starting in 2023.

The closer you are to the poverty line (or 138% of the poverty level in states that expanded Medicaid), the more subsidies you will receive, and the subsidies will decrease as your income increases. This applies to both premium and cost-sharing subsidies.

What will make me ineligible for a health insurance subsidy?

You will not be eligible for a health insurance subsidy if you can get affordable health insurance in other ways. For example, if you can get affordable health insurance through your job, but you prefer to purchase a health plan through your health insurance exchange, you are not eligible for a subsidy.

The law makes an exception to this if the health insurance offered by your employer is of poor quality or if the coverage is not available:

  • The Affordable Care Act defines affordability as health insurance that will cost you less than 9.83% of your income in 2021. (Note that this is only calculated based on the employee's self-insurance costs – the cost of adding family members is not taken into account, resulting in family disruption .)
  • If the health insurance available through your job doesn't provide a minimum cost , that doesn't invalidate your eligibility for a subsidy just because it's available. For a plan to offer the lowest cost, it must pay an average of 60% of covered costs and include "substantial" coverage for medical and inpatient care.

However, if you choose to enroll in an employer-offered health insurance program, even if it is not available or does not provide a minimum cost, you will not be eligible for a subsidy as long as you are enrolled in an employer's health plan. The government will not help you pay for health insurance if you already have health insurance at your workplace.

You are not eligible for a subsidy if you are registered for (or in some cases eligible for) government sponsored health insurance such as the Children's Health Insurance Program, the Office of Veterans Affairs, etc. Medicaid or Medicare (note that you can get premium subsidies if you are eligible for Medicare, but you will have to pay Medicare Part A premiums because you don't have enough work experience to qualify for Part A without premiums) …

You are not eligible for a grant if you are in prison or not legally residing in the United States.

If you are married, your tax status must be "jointly married" to be eligible for the subsidy. You are not eligible for a grant if your registration status is 'married, file separate return', except in limited circumstances of domestic violence or spousal abandonment.

As funny as it may sound, you are not eligible for a subsidy if your income is less than 100% of the FPL, even if you are in a state that has not been extended by Medicaid (unless you are a recent immigrant who was in the United States before the age of five ). Right; the poorest of the poor receive no premium tax breaks or cost-sharing subsidies.

That's because the legislators who wrote the Affordable Care Act assumed that anyone who earned less than 138% of the FPL would receive Medicaid. However, the Supreme Court ruled that the federal government cannot force states to grant Medicaid to all of these people. This means that each state can decide whether to extend Medicaid coverage to anyone who earns less than 138% of the FPL or to limit it to only those who are eligible for Medicaid based on stricter and older criteria.

And about a dozen other states have chosen not to expand Medicaid eligibility, although the federal government will cover 90% of the cost.

If your state chooses not to expand its Medicaid program and you live below the poverty line, you are in the so-called Medicaid coverage gap (which was not part of the ACA and was never thought to be a problem) and you will not be eligible. . for help paying for health insurance.

If you find yourself in this situation, you may be able to find charitable help in your area. Or you can use a public health center that provides primary health care services regardless of your ability to pay. Find a community health center near you .

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