Health insurance is a huge expense in the United States. The health care system is extremely complex and not always affordable, but there are ways to find health insurance that’s affordable. In most cases, your employer or job provides health insurance, and if yours doesn’t, you can buy it yourself from private health insurance companies. Unfortunately, health insurance is rarely free or even cheap, so finding the right insurance plan is crucial to your financial future.
Catastrophic plans have low premiums
A catastrophic health insurance plan has high deductibles but low premiums. This type of plan is designed for those who cannot afford expensive medical bills and are not eligible for a premium tax credit. Catastrophic plans also cover many preventive care services, such as at least three annual doctor’s visits for free. Although you should not choose a catastrophic plan unless you really need comprehensive coverage, it may be a good option for some people.
Catastrophic plans are only available to people under the age of 30 and those who qualify for a hardship exemption. Some regions may consider property loss as a major hardship. Catastrophic plans include low premiums and coverage of ten essential health benefits. The downside of catastrophic plans is their high deductibles – they only cover services after you pay huge deductibles. If you are in a position to pay such a high deductible, a catastrophic plan may be right for you.
Medicaid is free health insurance for people who qualify
Medicaid is a program that offers free health insurance to low-income adults and children. If you qualify, Medicaid may even cover 90 days of medical bills you missed. The program is based on the size of your household, which may include infants and children up to age 18; pregnant women, parents, and caretakers; and people 65 and older or with a disability. You must meet certain income and resource limits in order to qualify for Medicaid.
You can find out if you qualify by contacting your state Medicaid program. Medicaid coverage begins on the first day of the month you apply. Benefits may be retroactive for up to three months prior to the date of application. After three months, coverage stops. If you change your income or move out of state, you must re-apply. Once you apply, make sure you provide the necessary information to maintain your eligibility.
Medicare and Medicaid are similar, but they have differences. While Medicare is federally administered and pays for people 65 years old or older, Medicaid provides healthcare for people under age 65 or disabled. They overlap in many areas and almost 10 million low-income seniors are covered by both. This type of coverage is also free. If you do not have Medicare or are unemployed, you can apply for Medicaid if you meet certain requirements.
The Affordable Care Act has introduced a major new tool for making health insurance more affordable: tax credits. These tax credits are available through the federal and state Marketplaces. To qualify for the premium tax credits, individuals and families must earn between 100 and 400 percent of the federal poverty level. To qualify, individuals and families must also be a legal resident of the United States. In most cases, individuals and families with incomes between 100 and 400 percent of the FPL are eligible to receive premium credits.
The premium tax credit is calculated by comparing the premium cost of a family’s silver plan with the premium costs of the family’s bronze plan. If the premium costs exceeds $8,500, the premium tax credit is equal to six thousand dollars. Those with higher incomes must pay back the extra three thousand dollars. The ACA was created to make healthcare more affordable for the lower-income population. But the American Rescue Plan changed eligibility rules for the premium tax credit. Now, anyone with a household income of $100,000 or less can get a premium tax credit of six thousand dollars.
Anyone can apply for premium tax credits by visiting the Health Insurance Marketplace. To apply, you need to supply information about the income of the household and the ages of each family member. The process will take just minutes. You can claim the credit on your next tax return or apply for it online. Remember that you must submit all information accurately in order to receive the credit. The government can pay you directly for the insurance premium, or you can claim it one time on your tax return.