Health Insurance for Low Income

Health insurance premiums are too expensive for some individuals and families. But going without health insurance is risky. If you were to face an unexpected illness or injury, the medical bills could be overwhelming, especially if you need ongoing care.

Today, more than ever, there are free or low-cost health coverage options for low-income households, says Kimberly Liddell Jones, an insurance agent for Jayman Insurance in Sanford, Florida, an exclusive provider of Florida Blue plans.

“The government is helping so many people with tax credits and offering different plans,” Jones says. “Insurance companies have also restructured plans to be more inclusive and open up more doors. I can’t tell you how many policies I write where six or seven plans are offered at zero dollars because the tax credits cover that much.”

• Medicaid: Depending on your income and other qualifications, you may be eligible for Medicaid.
• Subsidized insurance: If you don’t qualify for Medicaid, you can get an income-based subsidy for Health Insurance Marketplace plans.
• Free health insurance: You may have additional options for free health insurance, including employer-based income, using a parent’s insurance plan, or Medicare.

Medicaid is a government health care program that offers insurance to adults, children, pregnant women, adults age 65 and older, and those with disabilities. You must qualify based on income limits, which vary by state. States administer Medicaid programs based on federal guidelines. As of January 2021, 73.8 million Americans were enrolled in Medicaid. Medicaid includes the Children’s Health Insurance Program (CHIP) for qualifying families with low income.

What does Medicaid cover?

Medicaid coverage depends on the state in which you live, but federal law mandates some benefits. Some of those mandatory benefits for health care services include:

• Inpatient and outpatient hospital services
• Physician services
• Laboratory and X-ray services
• Home health services

You can add optional benefits like prescription drug coverage, case management, physical therapy, and occupational therapy.

Beyond those essential mandatory benefits, Medicaid offers the following benefits:

• Early and Periodic Screening, Diagnostic and Treatment (EPSDT) services
• Nursing facility services
• Rural health clinic services
• Family planning services
• Certified pediatric and family nurse practitioner services
• Freestanding birth center services when licensed or recognized by the state
• Transportation to medical care
• Tobacco cessation counseling for pregnant women

Optional benefits states can offer aside from prescription drugs, physical therapy, and occupational therapy include:

• Clinic services
• Speech, hearing, and language disorder services
• Respiratory care services
• Diagnostic, screening, preventive, and rehabilitative services
• Podiatry services
• Optometry services
• Dental services
• Dentures
• Prosthetics
• Eyeglasses
• Chiropractic services
• Hospice
• Case management
• Services for those age 65 and old in an institution for mental disease
• Services in an intermediate care facility for individuals with intellectual disability
• State plan home and community-based services
• Self-directed personal assistance services
• Community First Choice Option
• Tuberculosis-related services
• Inpatient psychiatric services for individuals younger than age 21
• Health homes for enrollees with chronic conditions

How do you qualify for Medicaid?

You may qualify for Medicaid if you have low income and belong to at least one of the following groups:

• Families with children
• Qualified pregnant women
• Those receiving Supplemental Security Income (SSI)

Some states include additional groups, such as children in foster care. With the Affordable Care Act (ACA) of 2021, states can opt to offer expanded Medicaid to nearly all low-income Americans under age 65.

You can qualify for Medicaid based on Modified Adjusted Gross Annual Income (MAGI). MAGI is also used for tax credits and cost-sharing reductions on the Health Insurance Marketplace. You also have to meet other non-financial criteria, such as living in the state that will provide the care.

If you search for health insurance on the marketplace, which will require you to provide your household income, you will be directed automatically to Medicaid if your MAGI qualifies you. You can work with an insurance agent who will direct you to Medicaid health insurance options if you meet federal and state qualifications.

How does Medicaid vary from state to state?

Medicaid plans must meet federal requirements, but states administer Medicaid plans, which is why coverage and eligibility can vary depending on where you live. For example, Alabama has not expanded its coverage to include adults with low income like many other states have, and eligibility levels can range.

Following are state Medicaid resources so you can find out about plans where you live.

If you do not qualify for Medicaid, the Affordable Care Act (ACA) marketplace at Healthcare.gov provides affordable health care options. Because of the American Rescue Plan Act of 2021, you might qualify for lower-priced health insurance. The federal health care marketplace offers atool to help you figure out if your income qualifies you for additional premium tax credits.

When you create a marketplace account and submit an application, you can view all available health insurance policies. There are plenty of affordable and even free options once premium tax credits are applied.

You’ll create a marketplace account, then gather some basic information so you can prepare to fill out an online application. The marketplace asks for:

• Home and mailing address
• Basic information about applicants, including their relationship to you
• Social Security numbers for all applicants
• Immigrant documentation, if applicable
• Whether you file taxes jointly or independently, and whether you have dependents
• Employer and income information
• Estimated household income
• Health care coverage information if anyone in the household has a plan
• Employer Coverage Tool information if anyone in the household has an option to get employer health insurance
• Health Reimbursement Arrangement (HRA) notice if anyone in the household has one

After you apply, you’ll immediately find out if you qualify for a premium tax credit on a low-cost or no-cost health insurance plan or coverage through Medicaid or CHIP.

Premium tax credits

Premium tax credits are based on income and household information you fill out on the marketplace application. These premium tax credits subsidize your monthly health insurance premiums and have been extended to more people than ever before.

“Credits vary, and it doesn’t cost you any money to find out if you qualify,” Jones says. “Also, prices for health insurance are lower this year than in previous years, and open enrollment was extended to August 15.”

There are also federal poverty levels (FPLs) tax credits if your income is between 100% and 400% below the FPL. If your income is higher than the 400% FPL, you can still qualify for premium tax credits for a 2021 marketplace plan.

Do you qualify for Medicaid? How much does it cost? What does an unsubsidized marketplace plan cost? Find answers to these questions for your state in this table.

Aside from affordable health insurance on the ACA marketplace and through Medicaid, you can save money on health insurance if you or a spouse has a job-based plan through an employer who shares the premium cost with you. If you’re a young adult, you can use your parents’ health insurance coverage until age 26, even if married or not living at home. If you’re 65 or have a qualifying disability, you can get health care coverage through Medicare.

Before you discount whether you can find low-cost health insurance, Jones advises: “It costs nothing to verify where you stand. Know your options, and don’t be afraid to ask an insurance agent.”

Job-based health plan

Employers’ job-based health plans save you money on health insurance because the employer often shares the premium cost. Also, group plans tend to cost less. Some employers will pay up to 100% of the premium, and even if an employer splits the cost or pays much less, you still gain the benefit of lower-priced health insurance per month.

Suppose your job-based plan is considered affordable by the marketplace and meets minimum standards. In that case, you will not qualify for premium tax credits or other savings through the Marketplace if you opt for an ACA plan instead. Minimum coverage is if a plan pays at least 60% of the total cost of medical services for a standard population and includes physician and inpatient hospital services coverage. Job-based health plans are considered affordable if the cost is 9.83% or less of your household income.

Spouse’s health plan

If your spouse has a job-based plan through an employer, they can enroll you as a dependent, and you will get the same benefits. The marketplace also provides affordable health insurance for families, so your spouse can purchase a plan and add you as a dependent.

Parent’s health plan

If you’re younger than age 26, you can stay on a parent’s health insurance plan. Using a parent’s health plan is allowed even under these circumstances:

• You’re married
• You’re not living with your parents
• You’re attending school
• You have or adopt a child
• You’re not financially dependent on your parents
• You’re eligible to enroll in a job-based plan

If your parent buys health insurance through the marketplace, you can enroll on the initial application. Otherwise, your parent can add you during open enrollment. After you turn 26, you qualify for a Special Enrollment Period (SEP) to purchase a marketplace plan.

Medicare

Not to be confused with Medicaid, Medicare is a government health care program for adults 65 and older or people with qualifying disabilities.

If you qualify for Original Medicare, you’re likely to get Part A (hospital coverage) for free and Part B (medical coverage) for a standard monthly premium of $148.50. Medicare Part D (prescription drug coverage) is usually around $30 to $35 per month. You can opt to replace Original Medicare with a Medicare Advantage Plan, which may have a $0 monthly premium.

If you have low income, you may qualify for both Medicare and Medicaid, which offers dual coverage. Generally, Medicare pays first, and Medicaid pays second.

• Healthcare.gov Plan Finder: This is a government website designed to help you find private health plans outside of the Health Insurance Marketplace. These plans may often be available in the Marketplace, but this offers additional options.
• Local Help for Healthcare.Gov: Find local help navigating Marketplace plans.
• Centers for Medicare and Medicaid Services: Learn more about Medicaid coverage and qualifying for a low-income health insurance plan.

• Access to Medicaid Care | Last accessed April 2024
• Job-based Healthcare Plans | Last accessed April 2024
• Medicaid Information | Last accessed April 2024
• Medicaid Mandatory and Optional Coverage | Last accessed April 2024
• Medicaid State Overviews | Last accessed April 2024
• Medicare | What’s Medicare Supplement Insurance (Medigap)? | Last accessed April 2024
• Prepare to Fill Out a Health Insurance Marketplace Application | Last accessed April 2024
• Young Adult Health Insurance Coverage | Last accessed April 2024