Having trouble paying for health insurance? You’re not alone. Many people struggle to cover the cost of their plan without help, especially people who earn too much to qualify for Medicaid. As the public health emergency ends and Medicaid eligibility requirements change, many are trying to find coverage that fits their budget.
The good news is that there are resources to help people pay for their plan. We’ll help you figure out where to find them and determine if you’re eligible.
If you can’t afford insurance, you have the option of forgoing it, but we don’t recommend it. Health insurance can help you save on care, protect you in an emergency, and can include extra perks (like gym discounts) and perks (like wellness programs to help you feel better). In some states, insurance is legally required: As of 2023, residents of California, Massachusetts, New Jersey, Rhode Island, Vermont, and Washington DC could face tax penalties if they do not carry insurance. Regardless of whether you live in a state where insurance is required, there are options available to help make health insurance affordable.
How to get help paying for your health insurance
The Affordable Care Act (ACA) created government subsidies to help low- and moderate-income people pay for health insurance. They help offset the cost of monthly plan premiums, coinsurance, copayments, and deductibles. There are two types of subsidies: premium tax credits and cost-sharing. You can apply for these health insurance subsidies through your state’s health insurance marketplace.
Health Insurance Tax Credits
Premium tax credits pay a portion of your monthly health insurance premiums. The credit can be sent directly to your health plan each month, or you can claim it on your federal tax return (if you can pay the full price of your plan in the exchange).
To determine if you’re eligible for a tax credit, the government will look at your household size, overall income, and the average cost of health coverage in your area.
health insurance subsidy
A cost-sharing subsidy can help offset out-of-pocket health care expenses, such as deductibles, coinsurance, and copayments. For example, if your health plan has a $50 copay for an office visit, your cost-sharing subsidy could reduce that copay to $30. It also limits your out-of-pocket maximum.
To qualify for a health insurance subsidy, you must meet income requirements and be enrolled in an ACA-compliant plan in the silver category. People who are eligible for the cost-sharing subsidy almost always qualify for the premium tax credits. But not everyone who is eligible for premium tax credits is eligible for the cost-sharing subsidy.
How to qualify for subsidized health care
To be considered for subsidized health care, the government will compare your income to the Federal Poverty Line (FPL). Requirements vary by program, but those who qualify generally have a household income between 100% and 400% of the FPL.
To calculate the percentage of your income in relation to the FPL you must:
- Determine your modified adjusted gross income
- Divide by the poverty reference income level for your household size
- Multiply that number by 100
- Add a percent sign
For example: If your income is $35,000 and you have a household of three, divide $35,000 by $24,860 (100 percent of the FPL for a family of three in 2023), which equals approximately 1.41. Multiply by 100 to get the percentage. Your income level is 141% of the Federal Poverty Guidelines, or 141% of the FPL.
In 2021, the American Rescue Plan Act (ARPA) expanded eligibility for health insurance subsidies and tax credits to make health insurance even more affordable. So if you couldn’t afford coverage in the past, it might be possible now.
You may not qualify for a health insurance subsidy if you can get coverage elsewhere, have a household income that is outside the qualifying limits, or for a variety of other reasons. But you may want to consider other ways to shop for insurance or virtual care options until you can afford more comprehensive coverage.
Explore your state’s market
When it comes to shopping for health insurance, your first stop should be your state’s health insurance marketplace. Some states will have their own marketplace, like Minnesota’s MNsure. Other states, like Wisconsin, don’t have one of their own and go directly through the federal exchange at HealthCare.gov..
Don’t lose hope if you didn’t qualify in the past. The Affordable Care Act (also known as Obamacare) has evolved over the years to make health care more affordable for low-income households.
Buy insurance companies directly
When you shop for health insurance outside of a marketplace instead of a marketplace, you may find plans offered directly by an insurer that aren’t available in the state or federal marketplaces.
You don’t always need to see a doctor in person to get the care you need. A visit to Virtuwell never costs more than $59. And if they can’t serve you there is no charge.
Have more questions about your individual health insurance options?
Our experts will help you find a health plan you can trust, no matter your situation.