If You Are Not Eligible for Medicaid
If you are not eligible for Medicaid, don’t worry, you have other options. Health care expert Shelby George, CEO of PERKY, which helps employers educate employees about benefits, warns against enrolling in a plan without doing your research first.
“There are so many terms and complexities and misunderstandings in the health insurance world,” she says. “It’s become like shopping for a car. Spend the hours you need to understand what you’re getting for what you’ll pay.”
What to Look For
When searching for an affordable health plan, you should consider some key points:
– Medicaid: It’s free or very low-cost if you’re eligible
– A tax credit from the IRS that can reduce or cover the cost of the plan
– A cheap short-term plan, as IRS rules allow you to keep it for up to a year
What to Watch Out For
There are some points you should be cautious about when searching for a free health plan:
– Plans that claim to be low-cost but are not
– Income limits that can disqualify you from Medicaid
– Limited coverage of short-term policies
– The fine print: Plans often have complicated rules and exclude some care
Can You Get a Free Health Plan?
Some people may pay nothing or a reduced price if they qualify for a health care tax credit under the Affordable Care Act (ACA). The tax credit is applied upfront to lower the monthly premium for health insurance, although it goes directly to the insurance company.
Tax Credits
The amount of tax credit you receive depends on the household income you disclose when you apply. If you earn between 100% and 400% of the federal poverty level, you will qualify for financial assistance for the health plans you can purchase through the health insurance marketplace, which is the federal government program for purchasing ACA plans.
If you earn more than 400% of the federal poverty level, you may still qualify for financial assistance for the years 2021 and 2022, thanks to the American Rescue Plan. Even if your income was too high in previous years, you may qualify for tax credits for 2022.
The marketplace will send the credit directly to your insurance company to be applied to your monthly plan premium, reducing your out-of-pocket health care costs. The rules and costs of the credit can vary from state to state, but you should consider this option before settling on any other choice.
Filing Taxes and Tax Credits
You must file a tax return at the end of the year to reconcile your income with the tax credit you received. You may have to pay back some of the tax credit that reduced your costs if you had a higher income than you thought you had when you initially applied.
Inflation Reduction Act
In August 2022, President Biden signed the Inflation Reduction Act, which aims to lower the cost of medications covered under Part B of Medicare. Beginning in 2025, there will be a cap on annual out-of-pocket expenses for prescriptions set at $2,000, limits on monthly premium increases, and expanded support for low-income participants.
Is a Short-Term Plan Right for Me?
On February 20, 2018, the Trump administration proposed easing the restrictions on short-term health policies. The Obama administration had limited these plans to 90 days, but the 2018 rule allows for short-term policies of up to one year.
On
Although these plans do not cover pre-existing health conditions you have before purchasing the plan, they will cover you for the rest of the year if a condition arises during this period.
Short-term plans limit benefits compared to the plans offered in the ACA marketplace. They restrict healthcare for maternity, substance abuse, and mental health, and may deny coverage to individuals with pre-existing health conditions. These plans usually come with lower premiums than the plans available in the marketplace.
Can I combine health insurance plans?
You can try to mix supplemental insurance, which aims to pay a specific percentage of healthcare provider fees if you are hospitalized or experience an accident, with a short-term medical plan that allows you to visit the doctor several times a year for less serious illnesses.
In her previous role as Vice President of Advisory Services at Manning & Napier, Shelby George observed that people often try to arrange these plans on their own, sometimes with poor results. They had to submit each claim with all insurance companies to be reimbursed for every dollar. This was complicated, so the company offered combined plans with individual insurers to simplify the claims process.
However, Neet Borbora from Bicycle Health points out that you should consider two things when choosing health plans:
– Is the plan dependent on your health, or is it guaranteed, so you must enroll regardless of your age, health status, or other factors?
– What does the plan cover if you need to be hospitalized?
Always ensure you know what you will get before choosing a health plan.
Frequently Asked Questions (FAQs)
Is the Affordable Care Act still in effect?
“Obamacare” is another name for the Affordable Care Act (ACA), which became law in 2010 under former President Barack Obama. Its goal was to make healthcare and health insurance more accessible and affordable for everyone. Some components of the ACA have since been amended (including the removal of the individual mandate and penalty for not having insurance). The health exchanges created by the ACA remain a strong part of the country’s healthcare system.
What is open enrollment?
Open enrollment is the time period each year when you can change your health plan or enroll in a new plan. This applies to health plans offered by employers as part of benefits packages and to ACA-affiliated health exchanges. Open enrollment for the ACA typically starts on November 1 and ends on January 15 of the following year. Deadlines and details for open enrollment vary by state and may change each year.
What is CHIP insurance?
The Children’s Health Insurance Program (CHIP) is a health insurance program that covers children if their families earn more than qualifies them for Medicaid but cannot afford private insurance. CHIP programs vary by state, and some also cover pregnant women. State CHIP programs work closely with their Medicaid programs. You do not have to wait for open enrollment to apply for CHIP coverage. You can apply at any time, and if you qualify, you can start coverage immediately.
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Sources:
– Kaiser Family Foundation. “Marketplace Average Benchmark Premiums.”
– Centers for Medicare & Medicaid Services. “Medicaid & CHIP Coverage.”
– Internal Revenue Service. “Questions and Answers on the Premium Tax Credit: The Basics – What Is the Premium Tax Credit?”
– Centers for Medicare & Medicaid Services. “Premium Tax Credit.”
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Centers for Medicare & Medicaid Services. “American Rescue Plan and the Marketplace.”
– Centers for Medicare & Medicaid Services. “How to Save on Your Monthly Insurance Bill With a Premium Tax Credit.”
– Congressional Research Service. “Selected Health Provisions of the Inflation Reduction Act,” Page 1.
– Centers for Medicare & Medicaid Services. “Fact Sheet: Short-Term, Limited-Duration Insurance Proposed Rule.”
– Department of Health & Human Services. “Health Coverage Options for the Uninsured,” Page 6.
– Cigna. “What Is Short Term Health Insurance?”
– Kaiser Family Foundation. “Why Do Short-Term Health Insurance Plans Have Lower Premiums Than Plans That Comply With the ACA?”
– Connecticut State Office of the Healthcare Advocate. “How Indemnity Plans Work.”
– Centers for Medicare & Medicaid Services. “The Affordable Care Act.”
– Centers for Medicare & Medicaid Services. “When Can You Get Health Insurance?”
– Centers for Medicare & Medicaid Services. “Children’s Health Insurance Program (CHIP).”
Source: https://www.thebalancemoney.com/cheapest-health-insurance-you-can-get-4154320
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