Affordable Care Act

How to Buy Health Insurance if You Don’t Qualify for a Subsidy

Published on December 20, 2019

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If your annual income is too high to qualify for a subsidy to help pay your monthly premiums, you can shop for individual health insurance or cheaper alternatives, such as short term plans to fulfill your health insurance needs.

Who qualifies for subsidies?

Those who qualify for government subsidies – in the form of premium tax credits or extra savings – typically have a household income between 100% and 400% of the federal poverty line.

Persons in Family/Household100% of Federal Poverty Line200% of FPL300% of FPL400% of FPL
1$12,140$24,280$36,420$48,560
2$16,460$32,920$49,380$65,840
3$20,780$41,560$62,340$83,120
4$25,100$50,200$75,300$100,400
5$29,420$58,840$88,260$117,680
6$33,740$67,480$101,220$133,880
7$38,060$76,120$114,180$152,280
8$42,380$84,760$127,140$169,520

Your income in comparison to the federal poverty line or (FPL) is what determines if you are eligible for government subsidies to help offset the cost of health insurance. There are two types of subsidies: premium tax credits and cost sharing subsidies.

Premium tax credits are the most common type of subsidy and help you save on your monthly premium. Cost-sharing subsidies help offset the costs of out-of-pocket expenses such as deductibles and copays.

However, there is a steep cut off for subsidies in most states. This eligibility cut off with no phase out is referred to as the “subsidy cliff”.

Middle-income individuals and families who make just above the subsidy cut off of 400% of the FPL do not qualify for subsidies. This means that earning as little as $204 per year could put an individual or family over the 400% line and make them unqualified for subsidies.

With the average monthly cost for health insurance coming in at $440 for an individual, and $1,168 for a family in 2018 according to eHealth, many find it difficult to afford health insurance without a subsidy.

With the average monthly cost for health insurance coming in at $440 for an individual, and $1,168 for a family in 2018 according to eHealth, many find it difficult to afford health insurance without a subsidy.

average deductible for individual coverage years 2014-2018

What if I don’t qualify for subsidies?

You can still buy ACA-compliant health insurance without subsidies. However, your health insurance may not be as affordable for you than people who do qualify for either tax credits or cost-sharing subsidies.

You may not think you can afford an ACA-compliant plan without government subsidies, but there may be affordable options available in your area. Major medical coverage can be expensive but it’s important to have some coverage to help with paying for your health care, and protect your wallet from unexpected costly medical bills.

In order to have the minimum essential coverage guaranteed by the ACA, you must buy an ACA-compliant plan. Low-cost options include the lowest-priced bronze individual or family plan available in your area.

However, if you are and individual under the age of 30 – or qualify for a hardship exemption – and are in generally good health, you may be eligible for a catastrophic plan. Catastrophic plans are low-premium plans that tend to have a high-deductible but offer ACA-compliant coverage.

Even if you don’t qualify for a subsidy, let eHealth’s certified insurance agents try to help you find a plan that works for both you and your budget.

What if I can’t afford major medical insurance?

If you find that you don’t qualify for a subsidy and you can’t afford major medical insurance, there are other options you can explore.

In most states, you can buy short-term health insurance plans. Short term plans are a great option for those who do not qualify for subsidies but still have a hard time affording major-medical insurance since their premiums are substantially lower.

Even though these plans are called short term plans, you typically can keep your coverage up to 3 years in most states. While these plans do not offer as comprehensive of coverage as a major-medical health insurance plan does, they provide an affordable alternative to ACA-compliant plans which can be difficult to afford if you don’t qualify for a subsidy. Short term insurance plans provide some coverage, which can help keep you covered in worst-case scenarios.

Short term plans function in a similar way to major-medical insurance in that you will have a monthly premium and a deductible. However, short term plans do not cover everything that major-medical plans have to cover. Additionally, short term plans can deny you coverage based on something like a pre-existing medical condition.

Short-term health insurance in combination with other insurance products, like dental and or accident insurance, can help keep you and your family protected even if you don’t qualify for a subsidy.

Report any income changes as soon as possible

Even if you don’t qualify for a subsidy now, make sure to report any income changes throughout the year. You may become eligible for subsidies if you experience a drop in income.

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