What if You Don’t Qualify for Medicaid?
Don’t panic if you don’t meet the rules for Medicaid. You do have other options. Health care expert Shelby George, CEO of PERKY, a firm that helps employers educate employees about benefits, warns to be cautious about signing up for a plan without first doing your research. “There’s so much jargon, complexity, and misunderstanding in the health insurance world,” she says. “It’s become just like shopping for a car. Spend the hours you need to know what you’re getting for what you’re paying.” Keep some key points in mind when searching for a health plan you can afford.
Can You Get a Health Plan for Free?
Some people might pay nothing or a reduced rate if they qualify for the Affordable Care Act’s (ACA’s) premium tax credit subsidy. The tax credit is taken in advance to lower the amount of each monthly health premium owed, although it goes straight to the insurer.
Premium Tax Credit
The amount of premium tax credit that you receive will depend on the household income that you disclose when you apply. If you make between 100% and 400% of the federal poverty level (FPL), you’ll qualify for subsidies on health plans that you can buy through the health insurance marketplace, the federal government’s program for buying ACA plans. If you made over 400% of the FPL, you might have qualified for subsidies in 2021 and 2022, thanks to the American Rescue Plan. Even if your income was too high in prior years, you may be eligible for tax credits for 2022. The marketplace will send the credit directly to your insurer to be applied to your monthly plan premium, reducing your out-of-pocket health care costs. Rules and costs can vary by state, but this option bears looking into before you settle on any other.
Filing Taxes and the Premium Tax Credit
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 lowered your costs if you ended up with more income than you thought you would have when you first applied.
Inflation Reduction Act
In August of 2022, President Biden signed the Inflation Reduction Act, which is designed to lower the cost of prescription drug cost and health care. The Act will allow the government to negotiate prescription drug prices covered under Medicare Part B. Also, starting in 2025, there will be an annual out-of-pocket spending cap on prescriptions of $2,000, limits on monthly premium increases, and expanded subsidies for low-income participants.
Is a Short-Term Plan for Me?
The Trump administration proposed a plan on Feb. 20, 2018, that would loosen the regulations on short-term health plans. The Obama administration had capped these plans at 90 days, but the 2018 rule allows short-term policies of up to one year. Although these plans don’t cover you for pre-existing conditions that you may have had before you purchased the plan, you’ll be covered for the rest of the year if you develop a condition during this term. Short-term plans limit benefits compared with plans offered on the state ACA exchanges. They limit maternity care, substance abuse, and mental health, and people with pre-existing conditions can be denied. They typically come with lower premiums than marketplace plans.
Can I Combine Health Plans?
You can try mixing indemnity insurance, designed to pay a set percentage of the health provider’s fee if you’re hospitalized or in an accident, with a short-term medical plan that can let you go to the doctor a few times a year for more minor ailments. In her former role as senior vice president of advisor services at Manning & Napier, Shelby George noticed people trying to rig these set-ups on their own, sometimes with poor results. They had to file every claim with all insurers so that every dollar could be recouped. That was complex, so the company rolled out combo plans with single insurers to make the claims process smoother. Still, Bicycle Health’s Nate Purpura notes that you have to take heed of two things when choosing health plans:
Is the plan underwritten based on your health, or is it guaranteed issue, so it must enroll you regardless of your age, health status, or other factors?What does the plan cover if you have to be hospitalized?
Always make sure you know what you’d get before choosing a health plan.
