How to Find Affordable Health Insurance for Low-Income Families

Approximately 8%, or 26 million individuals, in the US, did not have health insurance during 2023. According to the National Center for Health Statistics, one of the main reasons for uninsured individuals' lack of coverage was their perception of being unable to afford the cost. Low-income families are affected by the high health insurance costs, which the Pew Research Center defines as households earning less than $56,600 annually.

People without health insurance are less likely to receive preventative services for major illnesses. High medical costs can lead to debt, making it difficult to pay for other living expenses.

Fortunately, there are affordable health insurance options that may help low-income families. This article highlights information on these choices to help families access quality care without spending too much money.

Government Programs

Medicaid and the Children’s Health Insurance Program are programs offered by the government that provide affordable or no-cost health insurance for low-income families.

Medicaid

Medicaid is the largest health insurance provider in the US, covering around 73.7 million individuals. Established by the Social Security Act Amendments of 1965, it is available in all 50 states, US territories, and the District of Columbia and offers healthcare to low-income individuals. It is a joint effort between federal and state governments to provide essential health services.

Eligibility Criteria

Eligibility for Medicaid is mostly based on financial criteria established using the Modified Adjusted Gross Income (MAGI) approach. The Affordable Care Act (ACA) established MAGI, which determines financial eligibility by considering taxable income and tax filing status.

It affects most children, pregnant women, parents, and low-income adults. However, some people, such as the blind, crippled, or over 65, are exempt from the MAGI-based system.

In addition to financial requirements, Medicaid applicants must meet specific non-financial criteria. These include:

• Residency in the state where Medicaid is applied
• US citizenship or qualified non-citizen status
• In some cases, limitations based on age or pregnancy

Certain groups, like those in the breast and cervical cancer treatment program or former foster care recipients, can receive eligibility without having income determinations.

Coverage Details

Medicaid coverage varies by state, but each state is required to provide certain mandatory benefits while having the option to offer additional services. Mandatory benefits, which are federally required, include essential healthcare services such as:

• Inpatient and outpatient hospital care
• Physician visits
• Laboratory and x-ray services
• Home health services

States may also choose to provide optional benefits like the following:

• Prescription drugs
• Case management
• Physical therapy
• Occupational therapy

Medicaid also supports home- and community-based services, which help individuals remain in their homes and active within their communities. The extent of coverage depends on the individual's needs, with some services provided by licensed professionals and others by family members, friends, or paid caregivers.

Children’s Health Insurance Program (CHIP)

CHIP was established under Title XXI of the Social Security Act in 1997 to provide health coverage to low-income children and pregnant women whose families earn too much to qualify for Medicaid.

CHIP allows states flexibility in designing their programs. States can use CHIP funds to expand Medicaid or create a separate health program to cover uninsured children up to age 18. Just like Medicaid, CHIP has no limited enrollment periods. Once qualified, the coverage can begin immediately.

Coverage Details

CHIP is available in every state, with each program operating in conjunction with the state’s Medicaid program.

CHIP also extends coverage to pregnant women in these states. These states include:

• Colorado
• Kentucky
• Missouri
• New Jersey
• Rhode Island
• Virginia
• West Virginia

Some states also may provide additional benefits depending on local policies.

CHIP offers comprehensive benefits, which include the services listed below.

• Routine check-ups
• Immunizations
• Doctor visits
• Prescriptions
• Dental and vision care
• Inpatient and outpatient hospital services
• Emergency services
• Lab tests
• X-rays

Difference Between CHIP and Medicaid

Medicaid and CHIP are both public insurance programs designed to provide healthcare coverage for children, but they differ in key aspects.

Medicaid

Medicaid offers the following aspects:

• Covers children from birth to 19 years old in families with incomes up to 138% of the federal poverty level (FPL), with some states setting higher limits
• Guarantees federal funding with no cap
• Prohibits waiting lists
• Allows dual coverage with private insurance
• Provides full benefits, including Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) services

CHIP

CHIP, on the other hand, is aimed at uninsured children in families whose income is too high for Medicaid, with enhanced federal matching funds up to 300% FPL. CHIP also has the other following aspects:

• With capped federal funding
• Permits waiting lists
• Does not allow dual coverage
• Allows premiums and co-payments
• May provide benchmark coverage but is not required to include EPSDT services

Premium Subsidies

Individuals and families with low incomes may be eligible for premium subsidies, also known as premium tax credits, through the ACA marketplace. These subsidies allow them to find health plans for as little as $10 monthly.

Premium tax credits apply to all four metal-tier levels of coverage, but the most generous discounts are available when choosing a silver plan, often referred to as the "benchmark" plan. By selecting a silver plan, one may also be eligible for additional savings on out-of-pocket expenses.

Catastrophic Health Plan

Catastrophic health plans offer low monthly premiums but come with very high deductibles. These plans are designed to protect against worst-case scenarios, such as serious illness or injury, but may not be ideal for routine healthcare needs due to the high out-of-pocket costs.

Catastrophic plans are available to individuals under 30 or to those who qualify for a hardship or affordability exemption. These plans cover essential health benefits, such as preventive services, at no cost and provide at least three primary care visits per year before the deductible is met.

Employer-Sponsored Health Insurance

Employer-based health insurance is a private insurance option available to employees and their dependents. Under the ACA, companies with at least 50 full-time employees are required to provide affordable health insurance, or they may face penalties otherwise.

Employer-sponsored health insurance must meet minimum standards, such as:

• Affordability
• Value
• Significant coverage of inpatient hospital and physician services
• At least 60% coverage of the total cost of insured healthcare

Employers select the healthcare plan, determine coverage options, and share the premium costs with enrolled employees. Typically, employers must cover at least half of the monthly health insurance cost for qualified employees. Companies also benefit from tax deductions when they contribute to employee premiums.

The advantages of employer-sponsored health insurance are the following:

• Simplified enrollment and claims processing for employees
• Promotes overall employee well-being

However, this may come with the following disadvantages:

• Employees may have limited control over plan features or coverage
• Coverage may not extend to all dependents
• Adding family members to the coverage can be costly
• Limited provider networks

Tips on How to Find Affordable Health Insurance

Two valuable tips on finding affordable health insurance are to check the Health Insurance Marketplace for health plans and to contact an authorized health insurance agent for assistance.

1. Check the Health Insurance Marketplace

The Health Insurance Marketplace shows options for affordable health plans, especially during open enrollment. During this period, interested individuals can apply for or update coverage.

The Marketplace offers plans that cover essential health benefits, such as:

• Prescription drugs
• Emergency services
• Mental health care

Many individuals may qualify for savings, including premium tax credits and reduced out-of-pocket costs. Applications can be submitted online, by phone, or with the assistance of community resources.

2. Contact A Health Insurance Agent

Working with a licensed health insurance agent can simplify the process of finding affordable health coverage. Agents can help individuals enroll through the Marketplace or handle the entire process at no additional cost, as their commissions are built into the price of every plan.

Agents also help individuals navigate complex health insurance options by:

• Explaining plan differences and how coverage works in practice
• Continuing to provide support even after enrollment
• Answering questions about benefits or claims

Resources on Affordable Health Insurance Options

There are several resources available to help families explore health insurance choices. Websites, including HealthCare.gov and Medicaid.gov, offer important information and tools for comparing plans and determining eligibility for subsidies or programs.

1. HealthCare.gov

HealthCare.gov serves as the official health insurance marketplace in the US, making it a valuable resource for finding affordable health insurance options.

It allows users to compare different health plans, ensuring transparency regarding coverage, costs, and benefits. The platform also helps users check if they qualify for subsidies or Medicaid and provides personalized recommendations based on household income, location, and family size.

2. Medicaid.gov

The eligibility criteria and coverage details for Medicaid vary per state. Given this, Medicaid.gov is a helpful resource, especially when looking for the contact details of the Medicaid system in each state.

3. State Health Insurance Assistance Program (SHIP)

SHIPs are a valuable resource for finding affordable health insurance options, particularly for Medicare-eligible individuals. They assist in identifying available assistance programs to lower out-of-pocket costs and clarify Medicare eligibility guidelines.

Takeaway

Affordable health insurance options for low-income families may be difficult to find, but they are certainly available in the US. There are government programs like Medicaid and CHIP that offer comprehensive coverage at little to no cost, and the Health Insurance Marketplace, where individuals can look for health plans with potential premium subsidies. There are also other alternatives, such as catastrophic health plans and employer-sponsored insurance.

Seeking assistance through a health insurance agent is recommended, especially if you need someone to answer your questions about health insurance plans. Visiting reliable resources online also enables you to compare plans and check your eligibility for subsidies or programs.

Looking for affordable health insurance may be challenging at first, but investing time in researching and enrolling in an appropriate health insurance plan will help in the long run, knowing that you can protect your family's health and financial well-being.

Frequently Asked Questions

Are there protections available for uninsured low-income families?

The No Surprises Act, effective January 1, 2022, protects uninsured low-income families by requiring healthcare providers to provide a good faith estimate of expected medical charges and allowing dispute resolution if bills exceed this estimate.

Can healthcare ministries be considered health insurance?

No, healthcare ministries are not considered health insurance. They are not subject to regulations; instead, they are faith-based cost-sharing schemes in which the members pay for each other's medical bills. Additionally, these ministries do not adhere to the ACA or key consumer protections.

Are there affordable health insurance options for uninsured low-income families who are ineligible for Medicaid due to citizenship and immigration issues?

Yes, low-income families who are ineligible for Medicaid because of citizenship and immigration issues may qualify for Emergency Medicaid, which provides coverage for medical emergencies.

Where can I find free or low-cost medical care if I don't have insurance?

Low-cost care is available at local community health centers, which offer a range of services—such as prenatal care, immunizations, and referrals to specialty care—on a sliding fee scale based on income.