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- Under the Affordable Care Act, certain individuals can qualify for financial assistance when purchasing a plan through the Marketplace.
- The determination for Medicaid eligibility is up to each state to decide.
- Eligibility for any sort of cost-assistance program is determined by annual household income.
- The modified adjusted gross income (MAGI) is what agencies use when looking at household income.
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The Affordable Care Act provides certain levels of financial assistance for individuals who are trying to obtain health insurance for themselves and their families. To determine eligibility for any of these cost-assistance programs, government agencies will need to take a close look at your income. They’ll need information regarding the income of everyone in your household, and they’ll take into account any deductions.
Once you’ve determined whether you’re eligible for any type of assistance, you can shop around to compare your options. Click here to compare health insurance quotes for free right now and find coverage options that meet your medical needs AND your budget!
Your Household Members
To figure out your annual income, you’ll need to add up the earnings of everyone in your household.
What constitutes a household? Below are examples of different types of households, according to tax purposes.
- Individuals who pay taxes on their own and don’t have any dependents
- Married couples (whether living together or not)
- Tax filers plus the children who they claim as dependents
- Tax filers plus the children under 21 who are under their care and who live with them
- Tax filers and their parents, if they are claimed them as dependents
- Tax filers and other relatives whom they claim as dependents
There are two other situations that might occur.
- A tax filer with shared custody of a child. In this case, your children are to be included in your household only when you claim them as tax dependents.
- A tax filer with a child under 26 who is not a dependent.
The child will be included in the household if he/she is planning on being covered under the parent’s Marketplace plan.
What income is included?
You’ll use your modified adjusted gross income to figure out if you’ll be eligible for assistance.
You’ll add up the following for each member of your household to calculate your modified adjusted gross income:
- Adjusted gross income for the year that you would like health insurance
- Excluded foreign income
- Social Security benefits that were nontaxable (not including Supplemental Security Income)
- Any interest that was tax-exempt
You can consult with the IRS if you’d like to learn more about what income is taxable. In general, all earned wages, interests, and dividends are taxable. Other items that are taxable are:
- Tips
- Unemployment compensation
- Social Security Disability Income
- Pension income
- Alimony
- Rental income
Since you’ll be trying to determine your income for a year that hasn’t been complete, you’ll have to do your best based on the information that you already have. You should try to predict any additions or reductions to your income that might occur from a change to your employment status or the status of your dependents.
Medicaid
Medicaid is an agency that is run by individual states. Each state has established its own income criteria, and they have also set their own system for determining out-of-pocket costs. Some states provide Medicaid without charging any monthly premiums, and some have set very low copayments to make health care services more accessible.
Many states have extended eligibility to adults and children with income at or below 133 percent of the of the federal poverty level. As stated previously, that income is determining by calculating your modified adjusted gross income.
Medicaid may also be available to:
- Pregnant women and their babies with a household income at or above 150% of the federal poverty level
- Certain disabled individuals
- Medically needy individuals
CHIP
The Children’s Health Insurance Program (CHIP) is for children in families whose income is low, but not low enough to qualify for Medicaid. CHIP is a state-administered program, so requirements vary depending on your state of residence.
Marketplace Assistance Programs
Some households that meet the income requirement can qualify for a premium tax credit when they purchase through the Marketplace. This tax credit can be applied directly to your premium, lowering your monthly payments for health insurance. The amount of your tax credit is related to where your income falls in the allowable range. When you apply for a Marketplace plan, representatives will assist you in determining your credit amount, if you’re eligible to receive any.
Another way to save money is by taking advantage of cost-sharing reductions. These are only applicable to people purchasing a Silver plan through the Marketplace.
Cost-saving reductions can potentially lower your copayments, coinsurance, and deductible. All of those savings could result in a lower annual spending on your health insurance than if you had chosen a Bronze plan through the Marketplace or a plan directly through an insurance company.
You can use both the premium tax credit and the cost-sharing reductions if you purchase a Silver plan. If you have any other type of plan through the Marketplace, you might only be able to use your premium tax credit. To figure out which plans will be the most ideal one for you, you can estimate your annual income, your expected health care needs, and compare costs associated with each plan you’re considering.
Affording Health Insurance in 2017
The Affordable Care Act, in many cases, expanded the amount and type of assistance that Americans can receive in relation to obtaining health insurance. To determine if you’re eligible for any sort of program, you need to calculate your modified adjusted gross income. You’ll need to add up the modified adjusted gross income for everyone in your household. If you meet the requirements, you may be eligible for Medicaid, a premium tax credit, or cost-sharing reductions. Your children may be eligible for CHIP.
If you don’t qualify for state health insurance, comparing quotes is the best way to guarantee you find the right plan for your budget. Enter your zip code below to compare free quotes now from multiple providers in your state!
[su_spoiler title=”References:” icon=”caret-square” style=”fancy” open=”yes”]
- https://www.healthcare.gov/income-and-household-information/household-size/
- https://www.healthcare.gov/income-and-household-information/income/
- https://www.irs.gov/publications/p17/pt02.html
- https://www.medicaid.gov/medicaid/index.html
- https://www.medicaid.gov/medicaid/eligibility/index.html
- https://www.medicaid.gov/medicaid/cost-sharing/index.html
- https://www.healthcare.gov/medicaid-chip/childrens-health-insurance-program/
- https://www.healthcare.gov/lower-costs/save-on-monthly-premiums/
- https://www.healthcare.gov/lower-costs/save-on-out-of-pocket-costs/
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