Bewilderingly, millions of Americans qualify for Obamacare health coverage via Medicaid and subsidies provided through premium tax credits – these help lower the cost of Marketplace plans significantly.
Subsidies for health plans vary based on income and family size. You may qualify for discounts on deductibles, copays, or other out-of-pocket costs depending on your state and health plan.
1. You are uninsured
If you’re uninsured, the Affordable Care Act (ACA) could be your ticket to getting free health coverage. Through subsidies or cost-cutting reductions, health insurance premiums become more accessible for people with lower and middle incomes.
Obamacare provides consumers with numerous consumer protections, such as the right to choose a plan that covers preexisting conditions and free preventive services like immunizations, cancer screenings and sexually transmitted disease tests without copays or deductibles. Furthermore, young adults can stay on their parents’ plan until age 26 without copays or deductibles being applied, and prevents health insurance companies from denying coverage based solely on preexisting conditions.
But even if you qualify for free Obamacare, other options could still be better suited to you. For example, if you don’t already have coverage but your employer offers coverage, they could qualify for tax credits to cover premium costs through an exchange.
2. You are eligible for Medicaid
The Affordable Care Act (ACA) expanded Medicaid coverage to low-income children, pregnant women, seniors and people with disabilities. States may also opt to expand their programs beyond federal minimum income thresholds and eligibility criteria.
Most states also have a Medicaid Excess Income Program to enable those whose income exceeds their state limit to become eligible for Medicaid if medically needy and their assets fall below a certain level. Sometimes referred to as “spend down,” this program acts like a deductible by forcing individuals incur health expenses until reaching a monthly threshold that allows them to remain eligible for Medicaid eligibility.
People who lose Medicaid may still sign up for Obamacare through the health insurance marketplace and qualify for subsidies to help pay for it, especially those who have experienced economic setback and are no longer covered under their employer-based health plans or who require more comprehensive coverage than standard employer plans provide. This option can also benefit unemployed persons needing more comprehensive health protection than what traditional employer-sponsored plans can provide.
3. You have an employer-sponsored plan
Employer-sponsored plans are one of the most cost-effective methods of health coverage available to American workers, often providing tax breaks to make coverage more cost effective and accessible.
Many employers offer plans with matching contributions from employees, making these benefits even more worthwhile for you. Furthermore, group health coverage and retirement savings plans may also be provided by these plans.
The Affordable Care Act limits how much you pay for health insurance based on your income, thus helping reduce premium costs. If your household income falls within 400% of federal poverty level, then you could qualify for premium subsidies on the Marketplace.
The Affordable Care Act mandates that employers with 50 or more full-time workers offer affordable coverage through what’s known as an employer shared responsibility provision.
4. You are self-employed
Self-employment offers many advantages, from independence and schedule flexibility to uncapped income and choosing your own employees. But self-employment also comes with specific tax considerations relating to health insurance requirements.
If you are self-employed and looking into health insurance options, the Health Insurance Marketplace is an invaluable tool to explore all available plans. Here, you may qualify for subsidies which could significantly lower monthly premiums.
Consider taking advantage of the Qualified Business Income (QBI) deduction, which can lower federal taxes by as much as 20% and provide your business with substantial tax savings. It should certainly be explored if you operate a small business that earns significant revenue; just remember it’s not for everyone and prior to making any decisions on taking advantage of this tax break consult with an accountant or financial planner first.
