How to Find Low-Cost Health Insurance: FAQ

If you're having trouble finding health insurance you can afford, you'll find more options now because of the Affordable Care Act.

Here are some common questions people have about finding low-cost health insurance.

I'm a 23-year-old college grad, and I'd like to get back on my parents' health coverage until I find a job with benefits. How do I do this?

To get started, contact your parents' insurance company to make sure it offers coverage for dependents. If it does, then the insurance plan has to accept you until you're 26. You're eligible even if you live away from home or you're married.

Next, find out when you can enroll. You may have to wait for the open enrollment period (generally November to January).

Keep in mind that going on your parents' insurance won't be free. If the plan only covers your parent -- or a parent and spouse -- expect the monthly insurance cost to go up when you join.

I buy my own insurance and have trouble paying for it. Will it be more affordable now?

It may be. You may be able to get tax credits to lower your premiums and other costs of health insurance. To be eligible, you must:

  • Be a citizen or legal resident
  • Buy your coverage through your state's new health insurance Marketplace, also called an Exchange
  • Make about $11,880 to $47,520 a year if you are single or $24,300 to $97,200 a year if you are in a family of four

If you make less than about $16,400 if you are single, or less than about $33,500 as a family of four, you may be eligible for Medicaid. Medicaid will cost you less than a plan on the Marketplace.

Unfortunately, not all states are expanding Medicaid. If that’s the case and your income is less than $11,880, you may not be able to enroll in Medicaid or be able to get a tax credit.

In general, you're not eligible for the tax credits if you could get coverage through a workplace. However, the coverage offered by your employer must be considered affordable. If your company offers a plan that costs more than 9.66% of your income or that does not cover at least 60% of the cost of covered benefits, you can look for a more affordable plan through your state's Marketplace and may receive tax credits to lower your costs.

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How do I find out if I'm eligible for a tax credit? If I am, how do I get it? I need the money now. I can't wait to get reimbursed.

When you go to your state's Marketplace, you'll fill out an application that includes details about your income and family size. Based on these, you will find out how much of a tax credit you qualify for. Once you pick the plan you want, you'll be able to see exactly how much money it will cost you.

One way the tax credits can work is that the government sends the money directly to the health plan you are joining. The plan uses that money to lower the amount you have to pay in premiums for the year. So each month, your premium cost is less than it would have been without the tax credit.

I've tried to get on Medicaid in the past but couldn't. Will my chances be better under the Affordable Care Act?

Possibly, but a lot depends on what state you live in.

Health reform called for more people to be able to get Medicaid. However, it's up to each state to decide whether to expand the program.

To find out if you can get on Medicaid now, go to HealthCare.gov. If the federal government is running the Marketplace in your state, you can fill out an application there. If your state is running its own Marketplace, you will be directed to another website where you can fill out an application. You can fill out one application to see if you qualify for Medicaid or for a tax credit to buy insurance on the Marketplace.

What's the cheapest insurance I can get through the Marketplace?

If you define cheap as the least amount to pay every month -- the lowest premium -- just for having insurance, then you may want to check out a "catastrophic" plan. This type of plan often has low premiums. It covers 3 office visits a year and will also provide free preventive health services. After that, you must meet your deductible before your insurance will provide any coverage.

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Often, though, when a plan has a low premium, the deductible is higher. That's true for catastrophic plans. A deductible is the amount you have to pay for medical bills before your insurance plan starts to pay.

A catastrophic plan isn't for everyone. To get on this type of plan, you must be under 30 or unable to afford other coverage.

A high-deductible health plan (HDHP) is another choice for paying less each month.

If you need to get health care often, it might be cheaper for you to pay more each month so that you have a lower deductible. That means your health plan will start contributing to the cost of your care faster.

I have a high-deductible health insurance plan that leaves me on the hook for a lot of medical expense each year. Can I do anything to save money on my health care?

Consider starting a health savings account known as an HSA. An HSA is a type of investment account paired with a high-deductible health plan that allows you to pay for medical bills with money you've set aside tax free.

The money that you put into an HSA is not considered part of your income.

If you're self-employed you can make tax-deductible contributions to your HSA.

You don't have to pay taxes when you use the money either, as long as you're using it to pay for qualified health expenses. The money you deposit into the account rolls over from year to year and continues to grow tax free over time. You can use the money at any time to cover the cost of medical expenses.

Can I just go without insurance and get my care from the ER?

Counting on the ER for health care is not a good substitute for seeing your own doctor on a regular basis. The hospital is also likely to send you a bill for your treatment, even if you're uninsured.

You can go without health insurance. However, if you do, you’ll pay a penalty of $95 per adult and $47.50 per child in 2014 or 1% of your annual income, whichever is greater. The penalty will go up steeply in the coming years.

Certain people may be exempt from having to pay the penalty.

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I'm about to turn 65, and I'm realizing that even with Medicare, my health care costs are going to be hard to afford. Can I get any help?

Maybe. It depends on how much you make each year. How much money you have in bank accounts and stocks is also considered. If your income is below a certain level, you may be eligible for one or more Medicare Savings plans in your state.

There are several types of savings programs. One helps pay premiums for Medicare Part A (hospital insurance) and Medicare Part B (medical insurance).

There are also savings plans to help pay deductibles, coinsurance, and copays.

WebMD Medical Reference Reviewed by Sarah Goodell on November 14, 2016

Sources

SOURCES:

American Public Health Association: "Why do we need the Affordable Care Act?" and "Medicaid expansion."

HealthCare.gov, "Young adult coverage;" "Medicaid;" "Health savings account (HSA);" "Flexible spending account (FSA);" "Tax Credits in 2014;" "Co-insurance;" and "Co-payment."

U.S. Department of Labor: "Young adults and the Affordable Care Act: Protecting young adults and eliminating burdens on families and businesses."

Families USA: "The young person's guide to health insurance for graduating seniors."

Henry J. Kaiser Foundation: "Explaining health care reform: Questions about health insurance subsidies" and "The requirement to buy coverage under the Affordable Care Act beginning in 2014."

U.S. Department of Health and Human Services: "2013 poverty guidelines" and "Health care law protects consumers against worst insurance practices."

Health Insurance 101: "Federal Subsides: Helping People Afford Health Care;" "Standardizing Health Plans;" and "What are high-deductible plans paired with a savings account?"

Caldwell, N. PLoS One, Feb. 27, 2013; vol 8.

Medicare.gov: "Medicare savings programs."

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