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Qualifying for subsidies.

You may feel that purchasing health insurance is prohibitively expensive, based on your income. The federal government does provide some subsidies to help lower income individuals afford coverage. Whether you qualify for a grant will depend on many factors. 
The main three are: 
1. Your household income
2. The number of your dependents 
3. In what part of the country you are located.

Estimate your income.

When you fill out the application, you’ll be using your modified adjusted gross income. Your adjusted gross income is the total amount of money you made last year, minus certain items.

List your household dependents and their income.

Now that you’ve got an income number, go to www.healthcare.gov and shop around for a plan you like. Depending on which method you select and what information you put in, the site will tell you whether you qualify for subsidies.

My income is too high for subsidies.

I know it can be frustrating if you seem to be just getting by but are deemed to be making too much money to qualify for a subsidy. 
Here are some suggestions. 

  • Go through the insurance company, not the Marketplace. 
  • Solicit help from an insurance agent or broker. 
  •  Investigate a health insurance seller online. 

Be sure to check and double-check your options. Keep in mind that even if you are unable to get lower cost on monthly premiums based on your income, you might be able to save on some out of pocket cost by selecting a higher deductible and qualify for a premium tax credit. This credit is for anyone purchasing health insurance through the health insurance marketplace.

How do health insurance premiums affect me?

Before the affordable care act, insurance companies could adjust your premium rated based on things like your health status, medical history, gender, and the industry in which you worked. All that changed with the ACA. Today insurance premiums can only vary based on your age, whether you use tobacco products, your family size, and where you live.

How does this work in practice?

Here are the basics: 
 

  • The older you are, the more premiums may cost you. If you’re older, you might pay more. 
  •  Suppose you smoke, expect to pay a higher premium. This doesn’t apply to tobacco used for religious and ceremonial purposes. Still, if you enjoy pipe cigarettes or cigars, keep in mind that it will cost you in healthcare premiums. 
  •  If you have a more prominent family, your premium will be higher. Your household size is determined by how many people you’re claiming as dependents on your tax return. 
  •  Also, consider that because premium prices vary from state to state and from city to city, you may have to move to get a better rate.
How can I determine my household size to better estimate how much my premiums will cost?

To figure out your household size, consider the following.

  • If you live alone and have no dependents or live with roommates and have no dependents, your household size is one.

  • If you are married and have two dependents, you are considered to have a household size of four. 
  •  If your spouse or one of your children has health insurance elsewhere
  • If your mother, father, brother’s sisters, aunts, uncles, or other family members live with you and are dependents, they are also counted in the household size.
  • If one of your family members, such as a grandparent, lives with you, but she or he is not a dependent, meaning his or her income is not included in your family income, he or she is not counted in your household size. 
  •  If you and your spouse are separated and have been living apart for the past six months, the person caring for a dependent child can claim a special filing status that will not include the other person’s income. Your household size will be two. (you and the child)
What are the penalties for not maintaining health insurance coverage?

As mentioned earlier in this section, if you don’t qualify for an exemption from the ACA rules about health insurance, and you still decide you don’t want to purchase insurance, you’re going to pay the penalty.  Here’s how it works

  • In 2014, the penalty was 1 percent of your annual household income above the tax return filing threshold of $10,150 or $95 per adult and $47.50 for each child under eighteen years old, whichever is higher.

  • In 2015, the penalty went up to either 2 percent of your annual household income or $325 per adult and $162.50 per child under eighteen. whichever is higher 

  • In 2016 and beyond, the penalty is 2.5 percent of your annual household income, $695 per adult and $347.50 per child. The maximum household penalty is $2085
    The penalty will continue to rise in the subsequent year. As you can see, the purpose of the penalty is to persuade you to get coverage and to get it sooner than later
What's my penalty if I only have health insurance for part of the year?

If you are not covered for part of the year, the penalty is prorated, so you won’t wind up paying the full amount.

When is it better to pay the penalty?

The only time you should even think of paying the penalty is if you’re generally healthy and have a reliable network of providers with whom you’ve pre-negotiated rates and caps on cost.

Do I have to buy health insurance if I cannot afford it?

You may be exempt from paying the penalty if you prove one of the
following hardships:

  • domestic violence

  • family death

  • natural disaster

  • Homeless

  • Eviction

  • utility shut off

  • bankruptcy

  • medical expenses

  • care for a disabled family member

  • a child that has been denied coverage in Medicaid
  •  you were ineligible for Medicaid 
  •  insurance plan was canceled
What if I have a gap in coverage of fewer than three months?

A change in your situation may mean that you go for a short period without coverage. If this is less than three months, don’t worry about a penalty. everyone is allowed one three-month gap per year without paying the penalty for not carrying health insurance.

Senior couple smiling
Health Insurance Qualifying for subsidies.