Guidelines for Selecting Appropriate Health Insurance
As the Affordable Care Act was launched in 2014, it provided Americans without insurance a strong motivation to find and keep a health insurance policy – a charge if they did not. While this fine was small then, it has been steadily increasing ever since. Because of this, there are numerous people who didn’t think that they would ever be able to afford health insurance on their own who have been pushed into buying insurance from the marketplace.
However, there’s some positive news for individuals who are on a budget. The ACA gives these individuals more insurance options than were available in the past. People with lower incomes also may be eligible for subsidies that can make their insurance premiums easier to manage.
If you are one of the Americans who are trying to purchase insurance on their own, because they do not get insurance through work, there are some things that you’ll need to know in order to keep your payments as affordable as you can.
Attempt to Qualify for a Subsidy`
If you’ll be purchasing an individual health care plan, you can do it by purchasing the insurance straight from a carrier or by shopping for policies that have been listed on the health insurance exchange managed by your state. This exchange, also called a “marketplace” is typically made up of private insurance companies that must offer packages of plans that have been standardized for families, individuals, and small businesses.
Working through this marketplace has both benefits and risks from a cost perspective. The government sets minimum guidelines for what is covered by these plans, so their price may be higher than plans that are purchased outside of the marketplace. However, some people are eligible for income-based tax credit if they use the exchange. This can make it worth looking at the exchange when you are shopping for a policy.
In order to obtain a subsidy as a single individual, you will have to be a citizen of the US and you also must earn less than 400% of the federal poverty level. This currently equals $47,520 or less per year for a single person, and below $97,200 for a family of four. You’ll be asked for your family size and income on the exchange site in order to help determine your eligibility for subsidies.
Determine if a Basic Plan Meets Your Needs
One of the best ways to keep your health insurance expenses affordable from month to month is to select a high-deductible health plan (HDHP). With these plans, you’ll have significantly lower premiums. However, you’ll also have a much greater risk if something should happen to your health – these are called high deductible plans for that exact reason.
One solid benefit of HDHPs is that you can combine them with a health savings account. This allows you to pay for your out of pocket medical expenses with money that has not been taxed yet. This means that if you’re in the 15% income tax bracket, you’re getting approximately a 15% discount on all of the health spending you have to do in a year.
If you are even more brave or have excellent health, you may even want to consider a “catastrophic” plan. This type of plan provides extremely basic protection and covers you for a minimum number of office visits per year, but you also have higher deductibles and coinsurance payments. Also, not everyone is eligible for this type of plan. You’ll have to be under 30 years old, or you’ll need to get a hardship exemption showing that you cannot afford to purchase health insurance coverage on the marketplace.
Determine if You Qualify for Medicaid
While attempting to increase the overall number of insured individuals, the ACA designed a minimum eligibility for Medicaid, which is the joint federal and state health program for residents below a specific income level. The income must be at least 133% of the income for the federal poverty level. This averages out to $15,800 annually for an individual and $32,319 for a family of four. If you have typically been in the middle class, but your income has lowered recently, for example, if your hours have been cut or you’ve gone back to school, you may find that you qualify. You may also qualify if your state has raised the income cut off to a level that’s higher than the federal metric.
Luckily, finding out if you are eligible for Medicaid won’t require any extra steps on your part. You’ll use the same application to determine if you’re eligible for Medicaid benefits or an income tax credit for health insurance.
Research Your Parent’s Plan
Many college graduates are finding it tough to find a full time job that offers health benefits. The ACA is, however, making it a simpler process for these individuals to obtain health coverage.
Younger individuals can opt to stay on their parent’s health insurance coverage until they are 26. There are some restrictions, however. You’ll have to be single and living on your own. You’ll also have to be independent financially and be unable to get insurance through an employer.
One of the simplest ways to save money is to compare insurance policies that are sold on the marketplace with those that are sold directly by insurance companies. Keep in mind, however, that policies with lower premiums aren’t always the best idea if they also mean that you pay higher fees throughout the year. This BSBSIL plan is a good comprehensive alternative otherwise.