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Insurance and Healthcare Consultant

Tammy Burns is an experienced health insurance advisor. She is ACA-certified for health insurance and other ancillary, life, and annuity product.

Choosing a health insurance plan impacts your ability to access quality care at an affordable price. Not only does health insurance defray the cost of care, but it also protects your financial future. Without insurance, a health incident or chronic condition could result in devastating expenses.

What You Should Know About Affordable Individual and Family Health Insurance

  • Insurance access varies: How you get health coverage depends on whether your employer offers coverage, your age, income, and other factors.
  • Consider overall affordability: An affordable health insurance plan isn’t just based on monthly premium, but all of your out-of-pocket costs including deductibles, copays, and coinsurance.

This guide provides guidance and resources for how to find affordable health insurance including:

What Are Your Options for Health Insurance?

“Before choosing a health insurance plan, it’s important to understand what it is giving you and how it will protect your assets,” says Patty Starr, president and CEO of Health Action Council.

Affordable health care for individuals and families is available. In June 2021, the Centers for Medicare & Medicaid Services (CMS) released a report showing that more than 1 million new and returning consumers pay $10 or less per month after advance payments and premium tax credits (APTC) for health coverage through the Health Insurance Marketplace.

Aside from the marketplace, there are other cost-effective health insurance options, including low-income health insurance.

Health coverage type How can you qualify? Affordability
Employer-based insurance plan Qualify as an eligible employee or through a family member, such as a spouse or parent. You also typically need to be a full-time employee. In most cases, a plan that meets minimum value will cover 60% of covered medical costs. You’d pay 40%.

Most job-based plans meet the minimum value standard.

Healthcare Marketplace insurance plan Apply on HealthCare.gov Pricing based on location, household income and who the plan covers. Plans can cost $10 or less after APTC.
Medicaid coverage Based on Modified Adjusted Gross Income (MAGI) Based on Modified Adjusted Gross Income (MAGI)
Medicare coverage Those age 65 and older; younger people with disabilities; patients suffering from end-stage renal disease or with a transplant Most people don’t pay a monthly premium for Part A (sometimes called “premium-free Part A“). If you buy Part A, you’ll pay up to $471 each month in 2021. If you paid Medicare taxes for less than 30 quarters, the standard Part A premium is $471. If you paid Medicare taxes for 30 to 39 quarters, the standard Part A premium is $259. The standard cost for Part B is $148.50 or higher based on your income.
CHIP coverage For children; based on Modified Adjusted Gross Income (MAGI) Based on Modified Adjusted Gross Income (MAGI)
Veterans Affairs coverage Those who served in active military, naval, or air service and did not receive a dishonorable discharge; active military and veteran families Free for service-connected injuries and illnesses; mental health and counseling; and based on income and other eligibility factors
Short-term health insurance Apply with local agents or directly with participating insurance companies Very affordable but does not meet minimum essential coverage and has underwriting and pre-existing condition clauses in many cases.

Americans have several affordable health insurance options, and there are subsidies available to defray the cost of coverage, Starr notes. Specifically, you can qualify for subsidies if you pay more than 8.5% of your household income toward health insurance.

The main types of health coverage are:

  • Employer-based insurance plans
  • Health Insurance Marketplace insurance plans
  • Medicaid
  • Medicare
  • CHIP
  • Veterans Affairs
  • Short-term health insurance

You can purchase individual health insurance through the Marketplace if you live in the United States, are a U.S. citizen or national, are not incarcerated, and are not covered by Medicare. You can get a free quote and see available Marketplace health insurance plans and prices based on household income, who the plan will cover, whether you have employer insurance, and your location.

Medicaid and Children’s Health Insurance Program (CHIP)  health insurance coverage is available based on Modified Adjusted Gross Income (MAGI). Individuals and families also can access premium tax credits and cost-sharing reductions through the Health Insurance Marketplace.

Medicare is a federal health insurance program for people aged 65 and older, younger people with qualifying disabilities, and those with end-stage renal disease or a transplant. Medicare Part A is hospital insurance covering inpatient hospital care, skilled nursing facility, hospice, home health care. Medicare Part B is medical insurance covering outpatient care, medical supplies, preventive services, doctor appointments, and more. Medicare Part D is prescription drug coverage.

Veterans Affairs (VA) health insurance is available for those who served in active military, naval, or air service and did not receive a dishonorable discharge; active military and veteran families. The cost can be free for illnesses or injuries related to military service. Other free services include counseling and mental health. Free VA healthcare can depend on income, disability rating, and other eligibility factors.

Short-term health insurance is available as a bridge and generally for less than 12 months, but up to three years in some states.

Are Low-Income Health Insurance Programs Available?

If you cannot afford products offered through health insurance providers or the Health Insurance Marketplace, there are low-income health insurance programs available for those who qualify, including Medicaid and CHIP.

What is Medicaid?

Medicaid is a joint state and federal government health insurance program that offers plans priced based on your Modified Adjusted Gross Income (MAGI). According to Medicaid.gov, individuals and families can participate in Medicaid if they are low-income, qualified pregnant women and children, and individuals receiving Supplemental Security Income (SSI). States can cover other populations, such as those receiving home and community-based services and children in foster care. With the Affordable Care Act, eligibility for children is at least 133% of the federal poverty level. Some states cover children with higher incomes. Most states expanded coverage to adults.

To get Medicaid, you must also meet non-financial criteria, including residence in the state in which you apply for Medicaid, U.S. citizenship (or qualified non-citizen), and lawful permanent residence. As of January 2021, 73,759,632 individuals were enrolled in Medicaid.

What does Medicaid cover? States administer their own Medicaid programs based on federal guidelines, which require specific mandatory benefits. States can add optional coverages. Mandatory benefits include: inpatient and outpatient hospital services, physicians services, laboratory and X-ray services, home health services. You can also get optional coverage for prescription drugs, physical and occupational therapy, and case management.

What is CHIP?

CHIP is the Medicaid Children’s Health Insurance Program, and it is also administered by states based on federal guidelines. The CHIP program provides coverage for families whose incomes are too high to qualify for Medicaid but cannot afford private health insurance coverage. Most states offer CHIP coverage for children at least up to 200% of the federal poverty level.

All states’ CHIP program coverage includes inpatient and outpatient hospital services, physicians’ surgical and medical services, laboratory, and X-ray services. States might offer additional benefits.

What Is The Best Affordable Individual Health Insurance?

The best affordable individual health insurance is available on the Health Insurance Marketplace. It will provide a quote and individual insurance options based on your location, who the plan will cover, household income and other requirements. All you have to do is fill out a simple online form to start the comparison process.

To get individual health insurance, you can visit the official website of the Affordable Care Act (ACA), which is HealthCare.gov. The Health Care Marketplace offers low-cost options for those who might not qualify for state and government programs, which use Modified Annual Gross Income (MAGI) and household income related to federal poverty level to determine eligibility.

Health insurance company Financial strength rating Customer satisfaction rating Value rating Coverage rating Overall rating
Aetna: best for customer service 5 4.8 4.8 4.8 4.8
Anthem: best value 5 3 4 4.5 4.2
Blue Cross Blue Shield: best for nationwide coverage 5 4.5 4.5 4.5 4.6
Cigna: best for coverage options 4.5 4.1 4 4 4.2
Highmark: best for coverage options 4.5 4 4 4 4.1
Humana: best for employer plans 4 4.5 4.5 4.5 4.4
Kaiser Permanente: best for high NCQA ratings 5 4.5 4.8 4 4.6
Molina Healthcare: best for underserved populations 5 3 3 4 3.8
UnitedHealthcare: best for plan options 4 4.8 4.8 4.8 4.6
WellCare: best for prescription plans 3.5 4 4.2 4.5 4

How We Rate Health Insurance Companies

Financial strength: The financial strength rating uses the insurance company’s AM Best financial strength rating. AM Best is a credit rating agency specializing in the insurance industry, which rates an insurer’s ability to meet ongoing obligations.

Customer satisfaction: The customer satisfaction rating considers Kaiser Permanente’s Better Business Bureau, National Committee for Quality Assurance, and Consumer Affairs ratings. These ratings use customer complaints and satisfaction ratings.

Value: The value rating calculates an insurer’s overall value based on monthly premium, annual deductible, office visit cost, ER visit cost, and annual maximum out-of-pocket cost.

Coverage: The coverage rating considers the insurer’s availability of coverages, plan types, and network size.

Do you qualify for low-cost Marketplace plans?

Under the ACA, you might qualify for subsidies so you can access low-cost individual health care plans. You can determine your subsidy eligibility by applying on HealthCare.gov or using the Find Local Help tab for in-person assistance.

HealthCare.gov will ask you to answer a few questions, including your ZIP code and household income. Subsidies are based on income level and other factors and are an estimated amount the government pays to insurers. You might qualify for an ACA subsidy that lowers the cost of individual health insurance through the Marketplace. If your employer doesn’t provide coverage, you purchase coverage through HealthCare.gov or your annual income is 100% to 400% of the federal poverty level.

Do you qualify for Medicare?

If you are age 65 or older, or are younger with a qualifying disability, you can qualify for Medicare Part A and Part B. If you’re under 65, you must have received Social Security Disability benefits for 24 months or have End Stage Renal Disease (ESRD) or Amyotrophic Lateral Sclerosis (ALS, also known as Lou Gehrig’s Disease).

If you are 65 and older and either you or a spouse worked and paid Medicare taxes for at least ten years, you can qualify for premium-free Part A Medicare.

Other ways to get premium-free Medicare Part A is if you:

  • Receive retirement benefits from Social Security or the Railroad Retirement Board;
  • Are eligible to receive those retirement benefits but have not filed for them; and
  • You or a spouse has Medicare-covered government employment.

Medicare has a convenient eligibility tool you can use to find out if you qualify and how much your premium might cost.

Do you qualify for VA coverage?

You can qualify for Veterans’ Affairs (VA) health insurance coverage if you served in active military, naval or air service (without a dishonorable discharge. According to the VA, you must have served 24 continuous months or a full period of active duty if you enlisted after September 7, 29180 or entered active duty after October 16, 1981.

Other ways to qualify for VA health insurance are to be discharged for a disability caused by or worsened by active duty. Or, you can get VA coverage if you were discharged for a hardship or “early out.” Those who were inactive duty and served before September 1980 also qualify.

If you are a current or past member of the Reserves or National Guard, you can only get VA coverage if you were called to duty and completed your tour. Active-duty status for training purposes does not qualify you for VA benefits. The VA outlines all eligibility requirements here.

Can you get short-term health insurance?

Sometimes, short-term health insurance is necessary as a bridge for individuals between jobs or temporarily out of work and unable to access benefits from an employer. Short-term health insurance typically has lower premiums than comprehensive plans designed as a long-term solution. However, there can be limitations, exclusions, and other coverage restrictions. Most short-term individual insurance plans are low-cost but often do not adhere to ACA standards because they do not qualify for minimum essential coverage.

“There are more short-term options available outside of HealthCare.gov,” Starr points out. However, she notes that short-term policies from insurance companies often do not have “staying power” and are designed more as transition policies.

“Many short-term policies still have exclusions or caps with limits per procedure or per incident,” Starr says.

Short-term insurance offers some coverage for preventive care, doctor visits, urgent care and emergency care. Prescription coverage might be an option. But the key, as Starr emphasizes, is to review exclusions and limitations information.

Should You Use an Employer-Based Insurance Plan?

Most people use employer-based insurance when available. Employer health plans also referred to as group plans, typically offer a financial advantage.

Usually, you are only responsible for a portion of the premium. If you choose individual health insurance through the Marketplace, you pay the full premium. Also, the employer does the heavy lifting of choosing plan options and usually provides a resource so you can ask questions about the plan. There is a tax advantage, too. Contributions toward your premium can be made pre-tax to lower taxable income.

If you have job-based health insurance and decide to enroll in a Marketplace individual health insurance plan instead, you will not get employer contributions toward premiums. You’re on your own. You also will not get a premium tax credit or other savings, and you’ll pay full price for your Marketplace plan.

You might be wondering if your employer’s health insurance plan is affordable. The ACA says a job-based plan is affordable if your monthly premiums for the lowest individual plan is less than 9.83% of your household income. If you enroll a spouse or dependents, that percentage changes.

Another way to tell if an employer’s health insurance plan is affordable is if it meets the minimum value standard. If the plan pays at least 60% of medical services and offers “substantial coverage” of hospital and doctor services, it’s considered affordable. You pay 40%, the employer pays 60%.

What Does Individual Health Insurance Cover?

The Health Insurance Marketplace at HealthCare.gov offers a range of individual plans that are priced based on how you share healthcare costs. You can opt for a plan with a lower premium and pay more out-of-pocket. Higher-premium plans usually cover more healthcare service costs, so you’ll have less of a financial burden.

Plans fall into one of three cost tiers: bronze, silver, and gold. The ACA emphasizes that these categories have nothing to do with care quality.

Coverage tiers

  • Bronze: The lowest monthly premiums with a higher deductible, so you pay more when you get care.
  • Silver: A higher premium than bronze plans with a lower deductible, so the plan covers more care costs.
  • Gold: These plans have the highest premiums and lowest deductibles, so the plan pays the most of all three tiers when you get care.

How Do I Find The Most Affordable Health Insurance?

The first place to go for affordable health insurance is the exchange at HealthCare.gov. However, you can also go to an insurance broker to get a short- or long-term individual health insurance plan. “There are more short-term policies outside of HealthCare.gov,” Starr says.

If you need help comparing plans or finding health insurance that suits your budget and needs,  you can seek help from a state navigator, Starr says.

Communities can also offer health insurance resources to residents. “Sometimes, bodies of worship such as churches and temples have experts come in to help their communities, and a lot of hospital systems also have navigators to help you with insurance options,” she says.

As you look for affordable health insurance, here are some key considerations:

  • Find plans available in your area
  • Research the network
  • Research prescription drug coverage
  • Compare monthly premiums
  • Compare deductibles
  • Compare copays
  • Research dental coverage
  • Check insurer ratings

Find plans available in your area

Plan pricing and availability can depend on where you live, which is why you want to be sure you are comparing coverage for where you live. When you search on the marketplace, you can find plans available in your zip code.

But before you choose a policy, find out whether the insurance will work in other states and countries where you travel, Starr says. “How will the policy cover you while you are out of region, out of state, or overseas?” she says. “Consider your lifestyle and family and how the plan will support and protect your risk in that lifestyle.”

Research the network

One of the biggest mistakes people make when buying individual health insurance is not checking the provider network first, says Starr. “If you have an online relationship with a provider and you want to keep that relationship, you need to make sure they are in-network,” she says. “Many people who already have a physician or specialist never check their policy to see if the person is in-network.”

Research prescription drug coverage

Prescription drug coverage varies based on the tier of individual health insurance you select. Before buying a policy, understand what you’ll pay for prescription drugs, so you are prepared to manage the cost of maintenance medicines, in particular. HealthCare.gov provides a tool so you can check the cost of your prescriptions with plans you’re considering.

Compare monthly premiums

Higher-premium plans cost more per month, but you’ll pay less when you need care. Ultimately, deciding whether to choose a lower or higher premium depends on how you prefer to budget your healthcare expenses. “If you want more consistency with how much you’ll pay every month, you might choose a higher premium so if you get sick, more of your care will be covered,” Starr says. “But, if you don’t have enough income for a higher-premium plan and pick a lesser plan, know that you’ll have to pay more at the time of service.”

Compare deductibles

A high-deductible health plan has a lower monthly premium, but you pay more for care at the time of service. You must reach your deductible before the insurance company pays its share. Some who select a high-deductible health plan pair it with a health savings account (HSA) to use the account to pay for medical expenses before taxes. According to the IRS, a high deductible is usually considered at least $1,400 for an individual or $2,800 for a family.

A lower-deductible health plan has higher monthly premiums, but you’ll reach your deductible faster. Deductibles vary for individual and family plans.

Compare out of pocket maximums

An out-of-pocket maximum is the most you can expect to pay per year, per person. It’s a cost factor that many people overlook when selecting an affordable health insurance policy. Out-of-pocket maximums are how insurance companies share the cost of care with policyholders.

Starr explains using this example: Say your deductible is $2,000, but your out-of-pocket maximum is $6,000. If you break a leg, are hospitalized, and need surgery, you’ll exceed that $2,000 deductible. But, you’re still on the hook for paying a bill at the time of service of up to $6,000. “People don’t plan for that number,” Starr says. “They plan for the deductible. That out-of-pocket max is so important.”

Compare copays

Not all health insurance plans offer copays that allow doctors’ visit costs to be more predictable.
Copays are a fixed amount you’ll pay for visits after you meet the plan deductible. Usually, plans with lower monthly premiums have higher copays.

Research dental coverage

Some health insurance plans bundle dental coverage, and others do not. Consider who is using the plan. If you are covering children and a spouse, dental cleanings and services like filling cavities can get expensive. Dental coverage can significantly reduce the cost of “dental maintenance.” An individual buying a plan for him or herself might prefer to pay for the service vs. adding the coverage to a health insurance plan.

“You really have to look at your usage to decide if it’s financially worth it,” Starr says, adding that this advice also applies to vision insurance.

Check insurer ratings

Before buying a health insurance plan, be sure to check ratings from reputable sources, including AM Best, J.D. Power, and the Better Business Bureau. Specifically, look at the types of complaints filed against the company. Are they related to coverage? Administration? Cost of the plan?

What is the most affordable health insurance by state?

The cost of health care depends on where you live. Major carriers in every state offer affordable health insurance policies on HealthCare.gov. Here are the lowest premiums available for every state, along with the number of major carriers (top 5% of market share).

Low-Cost Health Insurance Premiums
State Number of major carriers Average lowest-cost bronze premium
Alabama 1 $401
Alaska 1 $435
Arizona 4 $342
Arkansas 2 $322
California 4 $323
Colorado 4 $273
Connecticut 2 $368
Delaware 1 $400
District of Columbia 2 $337
Florida 2 $339
Georgia 4 $348
Hawaii 2 $314
Idaho 4 $330
Illinois 3 $337
Indiana 3 $333
Iowa 2 $311
Kansas 3 $373
Kentucky 2 $342
Louisiana 1 $410
Maine 3 $348
Maryland 2 $222
Massachusetts 4 $277
Michigan 2 $255
Minnesota 4 $251
Mississippi 2 $407
Missouri 4 $347
Montana 3 $330
Nebraska 2 $439
Nevada 3 $280
New Hampshire 3 $247
New Jersey 2 $319
New Mexico 4 $236
New York 7 $430
North Carolina 1 $350
North Dakota 2 $273
Ohio 5 $280
Oklahoma 1 $367
Oregon 4 $318
Pennsylvania 5 $306
Rhode Island 2 $231
South Carolina 1 $328
South Dakota 3 $454
Tennessee 4 $340
Texas 5 $301
Utah 1 $285
Vermont 1 $491
Virginia 4 $358
Washington 4 $280
West Virginia 3 $596
Wisconsin 6 $338
Wyoming 1 $519

Additional Resources

  • HealthCare.gov Preview 2021 Plans: Here, you can check out bronze, silver, and gold individual health insurance plans.
  • Centers for Medicare & Medicaid Services: Learn whether you qualify for Medicare, Medicaid, or CHIP, what the plans include, and how to apply.
  • Veterans’ Affairs Health Insurance: Learn who qualifies for VA health insurance and what policies include.
  • Healthcare.gov Plan Finder: This 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.

Sources