How Do I Get Cheap Health Insurance? 12 Money-Saving Tips
Insurance can feel very expensive, and it is, but it’s the type of expense that many people can’t afford not to have.
Not having adequate health insurance is a lot more expensive than having it when you need it, but it can be a struggle for many people. What can you do you lighten the load, and make insurance a little easy to afford so that you don’t have to go without it?
Here are a dozen tips we’ve put together to help ensure that you and your loved ones are getting the coverage that you need. From Medicaid to tax credits and everything in between, here are some ways that you can get cheap health insurance and make healthcare a little bit more affordable on yourself. After this, you won’t need to ask the question “How do I get cheap health insurance?” anymore.
Medicaid is a social assistance program for low-income individuals of any age. It is a federal-state program meaning it varies state-by-state but there are still federal guidelines which must be followed.
Medicaid provides free comprehensive health insurance to those who qualify. In most states, this means you must have an income that is 138% below the federal poverty level. Some states may have stricter guidelines including being a member of a vulnerable population such as: pregnant women, elderly, parents/guardian of minor children, disabled, and children.
This program is also available to immigrants who have been legally residing in the United States for a minimum of five years if eligibility requirements are met. Medicaid is not available to undocumenated immigrants but there may be exceptions available for pregnant women and those requiring short-term emergency care.
Medicaid is funded by federal and state taxes and administered by each state individually. The medical care you receive will be the same quality you’d expect from a private health insurance plan.
You can apply for Medicaid through the Medicaid program directly or the Affordable Care Act health insurance exchange.
2. IRS Premium Tax Credit
The premium tax credit (PTC) is a refundable tax credit that helps eligible individuals and families pay for premium costs associated with health insurance purchased through the Health Insurance Marketplace.
To qualify for this credit, your household income must fall between 100 and 400 percent of the federal poverty line for your family size and you must purchase your health insurance through the Health Insurance Marketplace. You need to have had coverage for at least one month within the calendar year and have been ineligible for affordable health care options including Medicaid, Medicare, or TRICARE. At least one of your health insurance premiums must be paid by the original due date of your tax return.
To apply for this credit, you need to include Form 8962 (Premium Tax Credit) when you file your tax return.
3. Short-term Health Insurance
If you require temporary coverage, short-term health insurance is typically a cheaper alternative to comprehensive health insurance. These short-term plans can be sold in some states with terms that last up to 364 days and may be renewable for up to 36 months. That said, some states do not permit the sale of short-term health insurance plans, so you may need to do some research to determine if this is a feasible option for you. It’s important to note that in some states that do allow short-term health insurance, there may be limits to renewability and duration-length.
While short-term health insurance can be an affordable option, these plans are not required to follow the Affordable Care Act requirements meaning there may be a cap on benefits to protect the insurer from losses that could incur from seriously ill (and therefore, expensive) customers. Most short-term plans do not cover maternity or mental health care, and may exclude coverage for outpatient prescription drugs. Almost all short-term health care plans exclude coverage for pre-existing conditions.
You may be denied coverage entirely if the insurer deems you a risk to insure so this option is typically better suited to young, healthy individuals with little to none known health issues.
You can purchase a short-term health insurance plan directly from a health insurance company or health insurance agent or broker. These plans are not considered minimum essential coverage meaning you would not be eligible for a special enrollment period for any ACA-compliant health care plan.
4. Affordable Care Act Subsidy
The Affordable Care Act was developed to assist individuals and families with low to modest incomes purchase and use reputable health insurance. This program works by providing government subsidies to those who qualify.
If you have an income between 100 and 400 percent of the federal poverty level, you may qualify for the premium tax credit subsidy under this act. For this subsidy, the government will cover part of your health insurance premium with you paying the remaining amount. This subsidy can even support middle-income earners which is especially important for those with a family requiring health coverage.
For those with an income between 100 and 250 percent of the federal poverty level, you will receive government help to pay for health insurance, copays, deductibles, and coinsurance. This is known as a cost-sharing subsidy.
Both of these subsidies can only be used to pay for Obamacare which is sold on the Affordable Care Act’s health insurance exchange, otherwise known as the Marketplace. You may not use these subsidies to pay for health insurance purchased through employment or outside of the Marketplace.
Legal residents of the United States, including documented immigrants may apply for Affordable Care Act subsidies.
5. Employment-Based Health Insurance
If you are currently employed you may be eligible for subsidized employment-based health insurance through your employer. Many employers throughout the United States offer subsidized health insurance options to their employees (and dependents) as part of an employee benefit package so it’s definitely worth looking into if you aren’t already aware of one. This is especially common for full-time employees working for a large company. If you are an employee of a small business or only work part-time this option may not be available.
To receive employment-based health insurance benefits, there is usually an application deadline given by the employer. If you miss the deadline, you may have to wait until the following annual enrollment period so it’s important to enroll right away. You may be required to wait between 30 and 90 days before your health insurance benefits “kick in”. If your employer offers a health insurance plan, you may be limited to one option or there may be several packages to choose from – it’s up to your employer.
With employment-based health insurance, the employer usually pays part of the monthly premium with you being required to pay the remaining balance. Your share should be automatically taken from your paycheck with the payroll reduction being removed from your paycheck before income taxes are calculated.
Employers generally won’t help cover the costs of deductibles, co-pays, and coinsurance. That said, they may offer other cost-saving alternatives including Flexible Spending Accounts, Health Savings Accounts, or Health Reimbursement Agreements to assist with these expenses.
When you leave your job, your health insurance benefits typically stop. That said, you may be eligible to continue using these benefits for up to 18 months with the assistance of COBRA or state continuation if you are willing to cover the entire cost of your plan’s premiums.
While employers generally subsidize premium costs for employees, they may not cover additional costs associated with a spousal or family plan. This means a higher amount will be taken from your spouse’s pay
6. Spouse’s Health Insurance
Similar to employment-based health insurance, if your spouse is employed and qualifies for health insurance through their job you may also be eligible for the same coverage. This is an option because most companies extend health insurance benefits to families and dependants of their employees.
Like an employee, you must enroll in an health insurance plan during the initial enrollment period, otherwise you will be required to wait until the next open enrollment period. You are not required to accept health insurance through your spouse’s employer, but it is a great option to have available. That said, it’s important to note that if your spouse’s employer offers family coverage that is considered affordable for only the employee, your family will not be eligible for premium subsidies through the health insurance exchange. Unfortunately, this can leave families without an affordable health insurance option.
While employers usually subsidize the cost of health insurance premiums for their employees, they might not cover the added expense of a spousal or family plan. This means your spouse will have a higher amount automatically deducted from their paycheck, but this is still generally more affordable than having a separate health insurance plan for you and/or your children.
7. Parent’s Health Insurance
If you are under the age of 26 and your parent has an individual market health care plan or health insurance through their employer, you may be eligible to receive coverage as a dependent. This is possible even if you are living on your own, are married, or aren’t considered a tax-dependent of your parent(s).
Like the previous two options, you may be required to wait until an open enrollment period before you can enroll in your parent’s health insurance plan. If you have just lost your comprehensive health care coverage, you may be able to enroll even if there isn’t an open enrollment period available.
There is generally a higher cost associated with having dependents on a healthcare plan. For employment-based plans, to cover the cost, your parent’s employer might subsidize family plans or your parent will be required to pay for the additional cost themselves automatically through their paycheck.
8. Catastrophic Coverage Plans
If you’re under 30, healthy, and earn a high wage a Catastrophic Coverage plan may be the right fit for you. These plans are known for having low monthly premiums making them a cost-friendly option for healthy individuals. However, there is a major downside: a high deductible. That’s why you shouldn’t enroll in a Catastrophic Coverage plan unless you are reasonably certain that you won’t have any major health issues within the next couple of years.
Of course you can’t predict what the future holds when it comes to your health but if you are a high wage earner, the higher deductible might not be such a bad thing if it means saving on your monthly premium.
Under the Affordable Care Act, you are eligible for a low-premium Catastrophic Coverage plan if you are under 30 or over 30 and qualify for a hardship exemption. Hardship exemptions include a variety of dire financial circumstances including homelessness, eviction, bankruptcy, and more.
With this type of plan, you are entitled to three primary care doctor visits per year, prescription drug coverage, and a variety of other benefits. That said, in order to receive these entitlements, you have to reach a high deductible of $7,900. Until then, you will be required to pay any out-of-pocket medical expenses.
9. Have kids? Look into Children’s Health Insurance Program (CHIP)
If you need health insurance for your children, the Children’s Health Insurance Program (CHIP) may be an option for you. CHIP provides health coverage for children at a low-cost for families that earn too much money to qualify for Medicaid. In some states, CHIP even provides coverage for pregnant women.
This option is available in every state throughout the United States, but the type of coverage and qualification requirements vary between states. You can apply for CHIP at any time without waiting for an open enrollment period like other types of health insurance plans. If you apply for Medicaid, you will be notified if you qualify for CHIP at the same time. If your children qualify for CHIP, you won’t need to purchase separate health insurance for them.
Although CHIP benefits vary between states, your children are entitled to comprehensive coverage including routine checkups, immunizations, doctor visits, prescriptions, dental and vision care, inpatient and outpatient hospital care, X-rays and laboratory services, and emergency services. Some states may offer additional benefits alongside comprehensive coverage.
Through CHIP, routine doctor and dentist visits are free but there may be copayments for other types of services. Cost will vary between states, but you shouldn’t be required to pay more than 5% of your family income.
10. Are you a senior? Medicare can help you save on health-related costs
If you are a senior living on a fixed-income, paying for healthcare-related services may seem like an impossible dream. Luckily, Medicare exists to help seniors just like you.
Medicare is a federally-funded health insurance program for people 65 years or older. It is funded primarily through payroll taxes paid by employees and their employers as well as the premiums deducted by the government through Social Security.
Medicare is composed of four parts: Part A (hospital insurance), Part B (health insurance), Part C (Medicare Advantage, a combination of Part A, Part B, and prescription drug coverage), and Part D (optional prescription drug coverage).
To be eligible for Medicare, you must be a United States citizen that is 65 years or older. There is no cost for Part A if you (or your spouse) are eligible or receive Social Security benefits or Railroad Retirement Board benefits or if you (or your spouse) have been employed in a government job and have paid Medicare taxes for a long enough period of time.
Part B does have a monthly premium, but the cost depends on your income making it an affordable option for most seniors. Likewise, Medicare Advantage includes the benefits of Part A and Part B with the inclusion of a prescription drug plan at a reasonable cost.
To learn more about Medicare, you can contact Social Security directly (online or by phone) or visit your local insurance broker.
11. Read the fine print
Although a health insurance plan may seem cheap, depending on the copay, coinsurance, deductible, and monthly premium you may end up paying more than you originally bargained for.
Before enrolling in a plan, ensure that you read the fine print to determine what services go towards your deductible and which ones don’t. You’ll also want to make sure that you are paying a reasonable copay and coinsurance because these costs can easily outnumber a “cheap” monthly premium, especially if you require significant medical care throughout the year.
12. Enlist the help of a health insurance agent
Finding your own health insurance plan can be a daunting task, but with the help of a qualified health insurance agent it doesn’t have to be. A health insurance agent can help find a plan that suits your needs and budget without the added stress of shopping around for the best deal yourself.
If you don’t already have a health insurance agent in mind, ask your friends and family if they have recommendations or conduct a quick search through the National Association of Health Underwriters to find a great local option.
Help! How Do I Get Cheap Health Insurance?
Here at MediClarity, our mission is to help you navigate the world of health insurance, so we’re always here to help you. Take a look around the rest of the site to answer any additional questions you may have, and when you’re ready to take the next step, we’ll take it with you.