Learn About Subsidized Health Insurance Plans

Your state’s health insurance marketplace offers a range of health insurance plans. Although the plans are designed to be affordable, they may not be what you would consider affordable health insurance.

To help more people afford coverage, the Affordable Care Act introduced subsidized health care plans. Depending on your income, you may qualify for assistance with your premiums (your monthly cost) and with your out-of-pocket costs.

Another option for cheap health insurance is your state’s Medicaid plan, which is also considered subsidized health insurance. Eligibility for Medicaid and other subsidized health plans is based on your family size, the ages of your family members, your family income and whether you or other family members are disabled.

What are subsidized health care plans?

Subsidized health care plans are health care plans that are partially or completely paid for by the federal or state government. For example, Medicaid is a subsidized health plan that is paid for by both the federal government and your state government.

The insurance marketplace in your state offers a variety of plans. If you qualify for a premium tax credit, you can use it to pay for any of their plans. If you qualify for additional cost-sharing, though, you can only purchase a silver plan.

Family and individual health insurance plans are categorized as follows:

  • Bronze plans—These offer the lowest monthly premiums, but the highest out-of-pocket costs. This government health insurance option is best if you are relatively healthy.
  • Silver plans—These have higher premiums than bronze plans but have lower out-of-pocket costs.
  • Gold plans—These have higher monthly costs than bronze and silver plans and lower costs when you need care.
  • Platinum plans—These are not cheap medical insurance plans, as they have the highest monthly costs. The benefit, though, is that you pay very little out of pocket when you need care.

Each plan may have different coverages, such as certain plans paying a portion or the entire cost of therapy with a licensed provider in-network or out-of-network. Marketplace plans are sometimes referred to as Obamacare plans. Many large health insurance companies offer plans through state marketplaces.

Who qualifies for subsidized individual health insurance?

Eligibility for subsidized individual health insurance is based on your income. If your income is below the federal poverty level, you will most likely qualify for Medicaid coverage. Some states have expanded Medicaid to include those with incomes up to 138 percent of the federal poverty level.

If your income is between 100 percent and 400 percent of the federal poverty level, you may qualify for a premium tax credit for more affordable health insurance. A premium tax credit lowers your federal taxes and pays that money toward your health insurance costs, which lowers your monthly health insurance costs.

If your income is between 100 percent and 250 percent of the federal poverty level, you may also qualify for cost-sharing. With cost-sharing, you have lower copays, coinsurance and deductibles when you receive care. This means you pay less whenever you go to the doctor or if you need a health care procedure.

The federal poverty level in the lower 48 states for one person is $12,490. In Alaska, it is $15,600 and in Hawaii it is $14,380. If you have a family, all your household income counts toward your subsidized health insurance eligibility. The poverty level increases based on family size as well.  

You may also qualify for cheap health insurance through Medicaid if you have a permanent disability and qualify for Social Security, if you are blind or if you are pregnant. Ultimately, the best way to find out if you are eligible for Medicaid or another subsidized government health insurance plan is to apply.

How to Apply for Subsidized Government Health Insurance

You have several options to apply for a health insurance marketplace plan and see if you qualify for assistance. You can:

  • Visit your health insurance marketplace website. This is often the easiest way to apply for coverage and for assistance.
  • Apply in person. You can find local insurance agents and non-profit organizations to help you determine your affordable health insurance options.
  • Apply by phone. Contact your state’s marketplace call center to complete an application by phone. For Medicaid, you may also need to do paperwork in person.
  • Apply by mail. Contact your marketplace and request a paper application. Complete it and mail it in to find out your eligibility.

Before you complete your application for family or individual health insurance, you should gather some information. You will need:

  • Your Social Security Number or immigration document information.
  • Income and employer information for all your household members.
  • The policy numbers for any health insurance you currently have.
  • Information about any insurance plans offered by your employer.

To complete the application for health care plans, you will need to provide your personal information, such as your name, address and date of birth. You will also need to provide some information about your federal taxes, such as whether you file jointly or have any dependents.

Next, you will need to disclose your income from all the jobs that you have. You can also disclose your deductions, such as the amount of alimony you pay, if any.

The next step to obtaining cheap medical insurance is to fill in the same information for all members of your household if they are also going to need health insurance. If they do not need insurance, you just need to provide their personal information.

You will also need to provide details about any health insurance you or other family members are using. You may also need to complete supplemental forms, depending on your situation. Once you have completed all the information, sign the application.

The health insurance marketplace staff will review your application and verify your income. If you qualify for subsidized, affordable health insurance, they will let you know. If you do not agree with their decision, you have the right to appeal.

You can appeal online, by phone or by mailing in a letter. Appealing takes time, but it might be worthwhile if you feel that there was a mistake in determining your eligibility.