As costs continue to rise in the individual health insurance world, consumers are continually looking for alternative cost-effective options. This is especially true for people who do not qualify for a monthly tax credit because their income is too high and those who are ineligible for underwriting with a short-term plan. But what about those who are on the other end of the spectrum and have income that is too low to qualify for a tax credit? Medicaid is an option worth exploring for those who are eligible for low-cost (and sometimes free) health care.
Medicaid is a joint state and federal program that is administered by each state to provide health coverage to particular groups of people. Medicaid enrollment in 2018 was just under 75 million and is the largest single source of health care in the United States. Eligibility for Medicaid varies from state to state and could depend on whether or not that state expanded Medicaid after 2010 when the Affordable Care Act (ACA) created the opportunity. This eligibility is based largely on your Modified Adjusted Gross Income (MAGI) and tax household size. One of the misconceptions around Medicaid is that only those with a low income are eligible for the program. However, certain conditions or situations may make someone eligible, including those who are disabled, pregnant, blind, or in foster care.
Children make up the largest group enrolled into Medicaid. Due to a high number of eligible children, it is important for each state to provide comprehensive benefits. If a state has chosen to provide a separate Children’s Health Insurance Program (CHIP), then they must provide one of three coverage types: benchmark, benchmark-equivalent, or secretary-approved coverage. Benchmark coverage is a plan that is equal to a Federal Employee Plan, State Employee Plan, or HMO plan in that state. Benchmark-equivalent coverage has an aggregate actuarial value that is equal to or greater than the benchmark coverage types listed above. Secretary-approved coverage is approved by the Health and Human Services (HHS) secretary to be appropriate for the targeted low-income children that are under the plan. Just like the ACA, the CHIP plans are required to cover certain benefits including well-baby and well-child care, dental coverage, behavioral care, and vaccinations for free or at very low cost.
CHIP can be especially helpful to families that make too much for everyone to be put on Medicaid, but not enough to purchase private coverage. Let’s take the example of a family of three (married with one child) that makes around $42,000/year gross. They are very close to the threshold amount of being eligible. If this family applies for Medicaid, the state can place the child on a CHIP plan (denying the parents), but allow the parents to enroll in private coverage with a monthly tax credit/discount. This situation is common and is something that some people tend to shy away from. In reality, it is a win-win situation because it allows everyone in the family to receive coverage and take advantage of all possible savings. Now, this example can vary state to state as each have different requirements, but even if a family is in a situation similar to the above, it doesn’t hurt to apply and let the state make a determination. Income limits also change year to year, so just because a family/individual is found not eligible one year does not automatically count them out for the next year.
The licensed sales representatives at ARC are available to help you sort through your health insurance options. Your family may be eligible for Medicaid! Contact us today for more information.