What are my options if I can’t afford major medical insurance?

Posted by | October 31, 2018 | News | No Comments

Although “affordable” is right in the name of the Affordable Care Act, many Americans find that the major medical coverage that Obamacare requires is too expensive for their budgets. As a result, some people choose to go without any insurance at all. But being uninsured is a scary prospect, especially if you have medical problems or a family to take care of. So if you don’t think you can afford major medical coverage, it’s time to start looking into alternatives. Here’s how to get health insurance in 2019 if you can’t pay the premiums for a major medical plan.

Cost Assistance

Before you write off the idea of getting an Obamacare major medical plan, make sure you understand the cost assistance that may be available to you. The ACA makes provisions for low- to middle-income Americans to help them afford traditional health insurance.

If your household income falls between 100 and 400 percent of the federal poverty level, you may be eligible receive premium subsidies to help cover the cost of your insurance premium. The subsidy amount for which you qualify is determined by your income level and the price of insurance plans in your geographic region. The federal government sends your subsidy directly to your health insurer, and you pay the outstanding portion of the premium each month. To take advantage of the premium tax credit, you can buy a plan through the health insurance marketplace or go through a broker as long as the plan you’re buying comes from an Obamacare exchange.

If your income is between 100 and 250 percent of the federal poverty level, you also have the option to choose a plan that offers cost sharing benefits. These are insurance plans that feature lower deductibles, lower coinsurance percentages and lower copays than those that are available to people with higher incomes. This extra cost sharing benefit is available only on silver plans, so you’ll need to pick a silver plan to take advantage of it. As a side note, silver plans tend to be the most popular option on the healthcare marketplace.

Medicaid

If you’ve never applied for Medicaid because you don’t think you qualify, consider it this year. Obamacare sought to expand Medicare eligibility so that more people could be covered through this joint federal and state healthcare program. The intent was that anyone whose household income was below 133 percent of the poverty level would be able to enroll in Medicaid.

But Medicaid regulations vary by state, and individual states have the right not to run expanded Medicaid programs. Rules about Medicaid eligibility also vary. Some states restrict access to pregnant women, children and the disabled, while others have opened up access to anyone who earns below the state’s earnings threshold. If you can’t afford major medical, look into your state’s Medicaid program to see if it’s an option for you.

Even if you don’t qualify for Medicaid, your children may qualify for the Children’s Health Insurance Program (CHIP), which is designed for people who earn too much for Medicaid but can’t afford coverage for their children. Look into CHIP for your kids even if you can’t apply for Medicaid.

Catastrophic Coverage

Catastrophic health plans are a low-cost form of coverage that you can buy through the healthcare marketplace, but only some people are eligible. To qualify for catastrophic healthcare coverage, you must be under 30 years old, or you must qualify for a hardship exemption because all other major medical insurance is deemed too expensive for you.

Catastrophic insurance covers the same services that other major medical insurance includes, but catastrophic plans have extremely high deductibles. Aside from preventive care and a few visits to your primary physician each year, you must pay the full cost of your medical treatment until you reach this level of spending. After you reach the deductible level, the insurance company will pay for any additional qualified healthcare spending that year.

Although catastrophic coverage can be purchased through the Obamacare 2019 marketplace, you can’t use a tax subsidy to help pay the premiums. If you qualify for subsidies, you may be better off buying a standard health insurance plan that requires lower out-of-pocket contributions toward your medical bills.

Short Term Health Insurance

Short term health insurance is available outside of the marketplace, and you don’t have to meet any income guidelines to qualify. These plans provide a limited set of benefits for a specific length of time. Also known as temporary health plans or limited duration plans, short term health insurance doesn’t count as minimum essential coverage, so it isn’t bound by ACA regulations to include any particular health benefits. Instead, short term insurers can select which types of services their plans will cover.

Limited duration plans typically focus on hospital visits, surgical procedures, trips to the emergency room and other major health needs, but they may exclude coverage for preventive care, prescription drugs or mental health services. Although this limited coverage can be a drawback if you have specific health needs, it can also be a positive thing. Covering only certain types of care allows insurers to keep short term insurance premiums low.

Insurers set specific health guidelines for their temporary health plans. Unlike with ACA major medical insurance, you can be turned down for a short term plan based on your medical history. Even if you are accepted for this type of health coverage, any preexisting conditions that you have will probably be excluded from your policy. Restricting coverage only to those who are relatively healthy is another way that short term insurers keep premiums in check.

In fact, short term health insurance plans often have monthly premiums that are hundreds of dollars less expensive than their major medical counterparts. If the idea of a low price tag appeals to you, you’ll be glad to know that beginning in October, you’ll be able to purchase a short term plan that lasts up to nearly a year in duration. You may be able to renew this plan for a total of 36 months of coverage, but the insurer has the right to reevaluate your medical history before issuing you another term of coverage.

Supplemental Products

Supplemental insurance products, also known as ancillary or voluntary benefits, are add-ons that can help round out your insurance coverage. If you buy short term health insurance in 2019, you might want to add some supplemental products. By grouping an assortment of insurance products, you can help create a reliable safety net that will help keep you out of financial trouble if a medical emergency arises. Voluntary benefits can also be used in conjunction with major medical insurance.

You might choose to use ancillary products on their own if you can’t afford health insurance. Just keep in mind that these benefits are not medical insurance and won’t contribute to your healthcare expenses in the same way that a comprehensive health plan will.

Some ancillary products are insurance plans that cover a specific type of care. Two of the most common are vision insurance and dental insurance. With plans like this, you may be able to receive routine exams and necessary care, such as oral cleanings, cavity fillings or eyeglasses. Plans may also contribute toward major eye or tooth procedures.

Other supplemental plans are designed to reimburse you a set amount of money when you require a particular type of care. These voluntary benefits can include accident, hospitalization and critical illness plans. The insurer does not send any payments to your healthcare provider, and you shouldn’t expect the money that you receive to cover the full cost of your care. However, you can use your reimbursement check to help pay your medical bills or deal with other expenses that arise in conjunction with your illness or injury.

If you’re not sure what to do about health insurance when you can’t afford it, talk to an insurance pro about your options. With open enrollment around the corner, now’s the time to browse plans and see what’s out there. And if you just can’t afford to spend a few hundred dollars a month on major medical, consider one of the above alternatives until you can. The bottom line is that you don’t need to forgo insurance altogether. There are options available to safeguard yourself and your family.

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