What To Know About Low Income Health Insurance – Forbes Advisor

Health insurance can be a strain on your budget, but there are options for affordable coverage if you have a low income.

You may be eligible for inexpensive comprehensive health insurance like Medicaid or subsidized coverage on the Affordable Care Act (ACA) marketplace.

What Type of Health Insurance Provides Coverage for Low Income Families?

There are several options for low income individuals and families who want a cheap health insurance plan. Eligibility for low income health insurance is typically based on your household income.

Here are some of the most common ways to get low income health insurance.

Medicaid

Medicaid is a low income health insurance program that is funded by states and the federal government. There are about 81 million Americans covered by Medicaid.

Medicaid is administered by states. Each state has its own unique criteria for eligibility, such as offering more generous income requirements for pregnant women.

In general, qualification for Medicaid depends on your household income, family size, your age and whether you have a disability. You can visit your state’s Medicaid website to see what the requirements are in your state and apply for coverage.

Unlike other types of health insurance, you don’t have to wait until an open enrollment period to get Medicaid. As long as you’re eligible, you can sign up for Medicaid coverage at any time.

Medicaid offers comprehensive health insurance coverage. Medicaid plans must provide at a minimum:

• Inpatient care
• Outpatient care
• Early and periodic screening, diagnostic and treatment services
• Nursing facility services
• Home health services
• Physician services
• Rural health clinic services
• Federally qualified health center services
• Laboratory and X-ray services
• Family planning services
• Nurse midwife services
• Certified pediatric and family nurse practitioner services
• Freestanding birth center services (when licensed or recognized by the state)
• Transportation to medical care
• Tobacco cessation counseling for pregnant women

States may also offer expanded benefits, including:

• Chiropractic services
• Clinic services
• Dental services
• Dentures
• Eyeglasses
• Hospice
• Occupational therapy
• Optometry services
• Other diagnostic, screening, rehabilitative and preventive services
• Physical therapy
• Podiatry services
• Prescription drugs
• Prosthetics
• Respiratory care services
• Speech, hearing and language disorder services

One drawback of Medicaid is that fewer health care providers accept it than private health insurance. A study from the Medicaid and CHIP Payment and Access Commission (MACPAC) found that less than 71% of general and family medicine physicians accepted new patients insured by Medicaid. That’s compared to 90% of new patients with private health insurance.

To find a doctor or hospital that accepts Medicaid, you can contact your state’s Medicaid agency.

CHIP

If you have a child, you might qualify for the Children’s Health Insurance Program (CHIP). Some states also cover pregnant women in their CHIP program. This insurance program, administered by states, provides medical insurance to children in low income families that earn too much money for Medicaid but can’t afford private health insurance.

CHIP provides coverage for many of the same services that Medicaid covers, including:

• Diagnostic imagingHospitalizations
• Emergency or urgent care
• Prescription medications
• Routine doctor visits
• Vaccinations

Like Medicaid, you can enroll your eligible children in CHIP anytime during the year.

Medicaid and CHIP are closely related, and like Medicaid, the eligibility requirements for CHIP are different in every state. Eligibility is typically based on annual household income in relation to the federal poverty level (FPL). For example, in Colorado, pregnant women can get CHIP if their income is below 260% of the FPL.

There can also be different income requirements depending on the age of the child. For instance, if you live in Arizona, you can enroll a child between ages 1 to 5 if your income is below 141% of the FPL, but to enroll a child between the ages of 6 to 18, your income must be below 133% of the FPL. That means the same child may no longer be eligible as they get older.

CHIP eligibility based on federal poverty level by state

Subsidized Affordable Care Act plan

Another way for low income individuals and families to get affordable health insurance is through a subsidized Affordable Care Act (ACA) marketplace plan. There are a few ways you can save money with this type of health insurance plan.

Some low income individuals can qualify for a premium tax credit, which lowers your monthly insurance premium. The premium tax credit is available for all four “metal” plan tiers—Bronze, Silver, Gold and Platinum. To qualify for the tax credit, your household income must be at least 100% and no more than 400% of the federal poverty level (FPL) for your family size. However, you may also need to meet other, non-financial criteria.

Federal poverty level guidelines

In addition to the premium tax credit, you might also be able to participate in cost sharing reduction (CSR) subsidies. These subsidies lower your out-of-pocket costs, like health insurance deductibles, copayments and coinsurance. However, to take advantage of CSR, you must choose a Silver tier health insurance plan on the ACA marketplace.

ACA health insurance plans are purchased through a federal or state health insurance marketplace. These plans cover 10 essential health benefits, such as outpatient services, maternity care, mental health, emergency services, hospitalization, rehabilitation and preventive care.

If you’re currently uninsured, you have to wait until the ACA marketplace open enrollment, which starts on Nov. 1, 2022. The only exception is if you experience a qualifying life event, such as moving to a new state, losing employer coverage, having a baby or getting married, and become eligible for a special enrollment period.

What Is the Best Health Insurance for a Low Income?

There are a few options for low income health insurance, but the best one depends on your household income and situation.

If you’re looking for the most comprehensive coverage at the lowest cost (depending on your salary), Medicaid and CHIP might be your best options. In some states, Medicaid and CHIP are combined, and in other states, they’re administered as separate programs.

You must meet certain requirements to get Medicaid or CHIP, and these requirements are different in every state. If you’re considering low income health insurance, start by submitting an application to see if you qualify and if you are eligible, how much money you can save.

If you’re not eligible for Medicaid or CHIP in your state, you might be able to get a subsidized ACA marketplace plan. According to data from the Kaiser Family Foundation (KFF), roughly 10 million Americans qualify for a premium tax credit, and the average monthly credit is $486.

Choosing the best low income health insurance ultimately comes down to cost. Most states have an online plan comparison tool, where you can get health insurance quotes and see how much you would pay for various plans based on your salary and household size.

Depending on where you live, you also might qualify for low income health insurance programs administered by your state of residence. Below are a few states that manage their own medical insurance plans for low income residents.

Low income health insurance in California

Covered California is the state health insurance marketplace where California residents can get a health insurance plan. When you apply for health insurance through Covered California, you can also apply for income-based financial assistance.

Some low income Californians can also get free or subsidized medical insurance through Medi-Cal, the state’s Medicaid program. There are special Medi-Cal plans for children in foster care, women undergoing treatment for breast and/or cervical cancer and low income pregnant women.

Low income health insurance in Florida

In Florida, several well-known health insurance companies contract with the state to provide Medicaid and CHIP benefits to low income individuals and families. Florida’s CHIP program is called Florida KidCare and is open to children between the ages of 5 to 18. There are also a few other programs available to low income Floridians.

For example, individuals who cannot qualify for Medicaid may be able to enroll in the Medically Needy program, which is overseen by the Florida Department of Children and Families (DCF). This program, which provides cost sharing savings, is designed to provide financial assistance for Floridians who would qualify for Medicaid, but whose income is above the maximum amount.

Floridians who want to lower the cost of health insurance can also look into a discounted prescription drug program. Florida DCF recommends two discount drug cards, which you can get through the Florida Discount Drug Card Program or Florida RX Card.

Low income health insurance in New York

New Yorkers have a few options for low income health insurance. One of the most common plans is Medicaid, which covers over 7.3 million low income New Yorkers. Like in all states, New York’s Medicaid requirements are based on your income and family size.

Children under 19 who are permanent residents of New York can get coverage under the Child Health Plus program, which is New York’s version of CHIP. Families don’t pay a monthly premium if their income is less than 160% the poverty level, which equates to about $767 per week for a three-person family or about $924 per week for four-person family.

New York also offers The Essential Plan, which provides comprehensive benefits to low income people with no monthly premium and low cost sharing. The Essential Plan is available to New Yorker’s who don’t qualify for Medicaid or the Child Health Plus program. It includes free preventative, dental and vision care, as well as coverage for prescription drugs, hospitalization and more, with no deducible.

Low income health insurance in Texas

There are several low income medical insurance plans available to Texans. Texas’ Medicaid program is called the STAR managed care program, which provides medical benefits to low income children and families. The plan is open to adults and kids age 18 and younger.

Children who are age 20 and younger and have a disability can enroll in the STAR Kids program, which is part of CHIP but is administered as a different plan. In addition, pregnant women can enroll in the CHIP Perinatal program, which provides coverage during pregnancy and for two months after childbirth.

Adults who are age 65 or older, or adults with disabilities, are eligible to enroll in the STAR+ Plus program. Texans in this program get access to long-term care services, such as assistance with daily tasks at home and help making home improvements for safe living conditions.

How to Qualify for Low Income Health Insurance

You must meet certain requirements to qualify for low income health insurance. This is the case for any low income health plan, such as CHIP or Medicaid.

Because each state operates its own low income health insurance programs, the eligibility requirements depend on your location. Some states have stricter criteria than others. In most states, your income must be below a certain percentage of the FPL.

FPL is determined based on your annual income and the number of people in your household. For 2022, the FPL for a single individual is $13,590. For a two-person household, the FPL is $18,310 and for a family of four, the FPL is $27,750. Because the FPL fluctuates each year, it’s possible that you could become ineligible for low income health insurance if your income changes.

But low income health insurance eligibility isn’t usually based on income alone. To get Medicaid, for example, most states require applicants to be residents of the state that is providing their coverage. There can also be requirements around citizenship, age and parenting status.

Visit your state’s Medicaid website or Healthcare.gov to learn more about low income health insurance eligibility and to apply for a low income medical plan.