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How to Buy Health Insurance When Subsidies Aren’t Available to You
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How to Buy Health Insurance When Subsidies Aren’t Available to You

By November 11, 202084 Comments

Open Enrollment is happening now on the Marketplace. And for millions of Americans, the affordable health insurance options are much needed. But what if you discover that the subsidies and benefits intended to make those insurance premiums and plans affordable aren’t available to you? Without those cost savings, you might be wondering what your options are. Today, we’ll shed some light on Marketplace subsidy alternatives and the next steps to ensure you’re able to find the best and most affordable health insurance plan for you.

Qualifying for the Marketplace Subsidies

Health insurance plans can, at first glance, appear to be expensive. But qualifying for the Marketplace subsidies can drastically reduce your cost burden, making most plans affordable for every income level household. It’s essential you verify what benefits may apply to you.

Don’t Presume You Don’t Qualify without Applying
In 2019, the Kaiser Family Foundation discovered that almost 60% of Americans who deserved Marketplace subsidies didn’t actually get them. That’s nearly 11.6 million people who bypassed tapping into those cost-saving benefits legally available to them. And they missed out simply because they neglected to sign up for insurance through the Marketplace exchange. Don’t assume that the Affordable Care Act is intended for the poor. It’s actually most beneficial to those who consider themselves in the middle-class income brackets. And it’s only available if you apply for it.

Verify You Have Accurately Submitted Your Information
Typically, Marketplace subsidy disqualification determinations occur because the individual’s income levels fall beyond the guidelines. Double check your math and income level estimates. These cost benefits are intended to help those who fall in between making too much for Medicaid coverage yet too little to afford more expensive, private health plans. To qualify, your income is gauged against the federal poverty level and should be projected to fall between $26,200 and $104,800 annually. Don’t miscalculate and inadvertently disqualify yourself from tapping into these savings.

Shared Responsibility Payment AKA Penalty Fee
Don’t worry about having to pay a penalty for passing up a health insurance plan that the federal government believes you can afford. For Marketplace health insurance plans through 2018, if you opted not to buy insurance because of subsidy denial or otherwise, you would be penalized with a Shared Responsibility Fee when you filed your federal taxes. Beginning in the 2019 coverage year, the Shared Responsibility Payment is no longer enacted. So if you are declined Marketplace subsidies, you can explore other options without fear of an Obamacare fine or mandate payment.

The Marketplace Can Still Present Options for You

Your first attempt at navigating the Marketplace during the current Open Enrollment period is suggesting that you don’t qualify for the cost-saving subsidies. Before you make the next decision, consider these three scenarios.

Understanding Both Types of Subsidies
The ACA offers two different types of Marketplace subsidies. Understanding both will ensure you can properly apply accordingly, based on your criteria. There are Premium Subsidies that are cost benefits for those who have household income levels between 100% and 400% of the federal poverty level. As a second type, there are also Cost-Sharing Subsidies referred to as cost-sharing reductions (CSRs.) These household income criteria are 100% to 250% of the federal poverty level, and Medicaid ineligibility is required. These candidates purchase a Silver Plan, and some states have other Medicaid income limits that also apply.

Mid-Year Eligibility
Your income levels may have you missing out on premium subsidies now, resulting in your option to select a health insurance plan that is reduced in cost. Staying within the Marketplace for coverage also means you have the potential to qualify for a Special Enrollment Period later on next year, should your income levels fall below your predictions. Marketplace subsidies may become available to you mid-year, allowing you to take advantage of the savings later. Even if you only choose to purchase a catastrophic plan now, if your household finances shift enough, you can tap into those premium subsidies.

Cost-Sharing Subsidy Eligibility Changes
If you tried to apply for Cost-Sharing Subsidies but found your income to be higher than the required 250% level, you then chose not to secure that Silver Plan due to cost. But much like the Premium Subsidies, you, too, can qualify for a Special Enrollment Period later in the year if your actual income drops within the designated range. You can then enroll in the Silver Plan and leverage those Cost-Sharing Subsidies. And because there are three tiers to these types of benefits, you can be sure to have options that you deem affordable.

Key Decisions You Can Make Now

Once you understand the various Marketplace subsidy options and have applied based on your predicted income levels, you can take the next step. If subsidies aren’t available to you now, here are three decisions you can make now.

Shop for a Private Health Insurance Plan
If the cost-saving subsidies aren’t available to you, you can consider browsing private health insurance plans. Buying directly from the insurance company, and not via the Marketplace platform, can be another health insurance path for you. The downfall, of course, is going to be the cost. It’s not uncommon for individual policies to be several hundred dollars each month in premiums. Family coverage options can be even more expensive.

Choose to Forgo Health Insurance
While you are certainly free to forgo buying any health insurance plan altogether, it can be a costly and unwise decision to do so. Even if you’re young or relatively healthy, there are situations that can arise, by accident or chance, that will require medical attention. Hospital stays, x-rays to determine a broken bone, or even complications from the common flu can all result in expensive medical bills. Considering many areas of the country are still facing COVID-19 challenges, you may want to reconsider going without coverage, with or without the Marketplace subsidies.

Browse with W3LL to Find an Affordable Marketplace Alternative
Even without the qualifying Marketing subsidy, you can find alternative health insurance plans during this Open Enrollment period. Because there are so many available plans, short-term and catastrophic included, it can be daunting to try and identify all of your options. Consider browsing with W3LL, and leverage our calculator and guidance for free. We can help you explore health insurance plans that make sense for you now. And have a Marketplace partner to help you make changes to these plans, should you experience a Qualifying Life Event later next year, and become eligible for subsidies and Special Enrollment Periods.

Losing out on a Marketplace subsidy doesn’t mean affordable health care isn’t available to you. Carefully consider your application income estimates, your health insurance needs, and let the W3LL experts help you find your best Marketplace options.

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