It may come as little surprise that “affordable health insurance” and “cheap health insurance” are among consumers’ highly searched healthcare terms.1 Since the Affordable Care Act’s passage and long before it, the ability to qualify for and afford health insurance has been an important social and political topic.
For many of us, buying health insurance comes down to finding reliable coverage that offers the least expensive premium and lowest deductible. Obamacare subsidies such as premium tax credits and cost-sharing reductions can help reduce our monthly premiums and overall out-of-pocket healthcare costs, but what happens when one does not have access to affordable employer-based coverage and the annual open enrollment period for private health plans (on and away from the Obamacare exchanges) has come and gone?
What does the U.S. government consider affordable health insurance?
First, let’s take a look at what it means for a health insurance plan to be “affordable.” It tends to be a subjective term with a definition that will vary by household, right?
So, what exactly constitutes “affordable” in the Affordable Care Act? By definition, a job-based health plan that only covers the employee and costs 9.66 percent or less of the employee’s household income is considered affordable.2
If an employee’s household income is $55,000 per year, or $4,583 monthly, then 9.66 percent of that individual’s monthly household income is $414.
Let’s say that individual’s monthly cost for the least expensive employer-based, self-only coverage available to them is $375. Then, the plan is considered affordable because it is less than 9.66 percent of that person’s individual monthly household income.
There are general hardship exemptions, along with others, that excuse individuals and families from the shared responsibility provision and prevent them from owing the shared responsibility payment (i.e., tax penalty) if they go without minimum essential coverage. Visit IRS.gov to learn more about these exemptions and how to claim and report them.
If you don’t have access to an affordable employer-based health insurance plan and find yourself uninsured outside of the Obamacare open enrollment period, here is how to find health insurance that accommodates your household budget and healthcare needs.
Remember: Even if you are exempt from having minimum essential coverage under the ACA, having health insurance benefits can help you pay for unexpected healthcare costs you may incur.
How to find health insurance you can afford in 3 easy steps
Step 1: Determine your Medicaid eligibility
Under the Affordable Care Act, many states elected to expand Medicaid to most low-income adults who earn up to 138 percent of the federal poverty level. As of July 7, a total of 32 states, including the District of Columbia, had done so.3 Criteria for eligibility varies in states that have not expanded Medicaid.
Medicaid enrollment is available year-round. To learn more about your state’s Medicaid program and find out how to apply, visit Medicaid.gov.
Do you qualify?
Yes. Continue with the Medicaid application and enrollment process in your state.
No. Move on to Step 2.
Step 2: Find out if you qualify for a special enrollment enrollment period
Certain qualifying life events (e.g., getting married or divorced, moving, adopting or giving birth to a child) may make you eligible for a special enrollment period outside of Obamacare open enrollment. Special enrollment periods are limited periods of time in which you can purchase or switch Obamacare plans immediately following such life events.
To find out if you qualify for special enrollment, contact a health insurance producer for assistance or visit a your state’s Obamacare health insurance exchange.
Do you qualify?
Yes. Continue with the application and enrollment process. If you purchase your health insurance from a state-based or federally facilitated exchange, be sure to apply for income-based Obamacare subsidies including advanced premium tax credits and cost-sharing subsidies.
No. Move on to Step 3.
Step 3: Buy temporary health insurance
Until you can buy a 2017 plan during open enrollment, you may want to purchase a health plan to help with medical bills should you become ill or get injured. Short term health insurance plans offer temporary benefits for as few as 30 days, which can come in handy for brief intervals between Obamacare plans. Plans begin quickly—as soon as the day after you apply.
It is important to understand that short term health insurance plans differ from Obamacare plans and are not ACA-compliant. This means that although they offer benefits for range of covered healthcare expenses when you are between ACA-compliant plans, they are not considered minimum essential coverage that fulfills the individual shared responsibility payment, they do not include essential health benefits, and you may be denied coverage based on your health history.
Do you qualify?
Yes. Purchase your temporary health plan, and use the benefits until your next Obamacare plan takes effect. The 2017 open enrollment period begins Nov. 1, 2016, and lasts through Jan. 31, 2017. Jan. 1, 2017, is the earliest effective date available for 2017 Obamacare plans.
No. Contact a health insurance producer to discuss your options.
Work with a health insurance producer
Because there are many health options available to consumers, guidance during the shopping and enrollment process can be helpful. Health insurance producers have experience finding options for individuals with varying needs and circumstances. They understand the market, the ACA and the various options available, and because they work on commissions paid to them by insurance companies, they do not charge you a fee for their services.
Call the number at the top of your screen to speak with a certified advisor (i.e., licensed health insurance producer) about Obamacare, supplemental health plans and other products that offer healthcare benefits.