Health insurance can be confusing. It’s hard to know what you need and often even harder to find an affordable plan that covers everything you need without breaking the bank. In this post, we’re going to help make health insurance a little less confusing by walking you through how to calculate if a health insurance plan is affordable for you. We’ll also provide some tips on how to save on your health insurance premiums.
What is the Affordable Care Act?
The Affordable Care Act (ACA) is a health insurance reform law that was passed in 2010. The ACA’s main goals are to make health insurance more affordable and accessible for Americans. The ACA does this by providing subsidies (financial assistance) to help people pay for health insurance, and by expanding the Medicaid program to cover more low-income Americans. The ACA also requires all Americans to have health insurance or else pay a tax penalty.
There are four main ways that the Affordable Care Act makes health insurance more affordable:
1. Subsidies: The ACA provides subsidies (financial assistance) to help people pay for health insurance. These subsidies are available to people with incomes below 400% of the federal poverty level ($48,560 for an individual or $100,400 for a family of four in 2018). To learn more about how subsidies work, check out this blog post.
2. Medicaid expansion: The ACA expands Medicaid coverage to millions of low-income Americans who were previously ineligible for the program. This expansion is available to adults with incomes up to 138% of the federal poverty level ($16,753 for an individual or $34,638 for a family of four in 2018). To learn more about how Medicaid expansion works, check out this blog post.
3. Individual mandate: The ACA’s individual mandate requires all Americans to have health insurance or else pay a tax penalty. The tax penalty for not having health insurance is 2.5% of your yearly income or $695 per adult ($347.50 per child under 18), whichever is greater. The individual mandate helps to ensure that everyone has health insurance and helps to keep premiums low for everyone.
4. Guaranteed issue: The ACA requires all insurers to offer health insurance to everyone, regardless of their health status or pre-existing conditions. This means that people with pre-existing conditions can’t be denied coverage or charged more for their insurance.
How to calculate if health insurance is affordable
In order to calculate if health insurance is affordable, you will need to take into account your current income and budget. You will also need to consider the cost of health insurance in your area.
There are a few different ways to calculate if health insurance is affordable. The most common way is to use the Federal Poverty Level (FPL) guidelines. To do this, you will take your total household income and divide it by the FPL for your family size. If your result is below 400%, then health insurance should be considered affordable for you.
Another way to calculate affordability is by using the Health Insurance Marketplace Calculator. This tool can be found on Healthcare.gov and will give you specific results based on your family size, income, and location.
If you are still not sure if health insurance is affordable for you, there are many resources available to help you make a decision. You can speak with a navigator or broker who can help you understand your options, or visit your local Department of Health and Human Services office for more information.
What are the penalties for not having health insurance?
If you don’t have health insurance and you don’t qualify for an exemption, you’ll need to pay a fee. The fee for not having health insurance is sometimes called the individual shared responsibility payment.
You’ll owe the larger of these two amounts:
2.5% of your yearly household income. (Only the amount of income above the tax filing threshold, about $10,150 for an individual, is used to calculate the penalty.) The maximum penalty is the national average premium for a bronze plan.
$695 per person for the year ($347.50 per child under 18). The maximum penalty per family using this method is $2,085.
What are some alternatives to health insurance?
There are a few alternatives to health insurance that can help you cover your medical costs. One option is to join a health care sharing ministry. These ministries are faith-based organizations that allow members to share their medical expenses. Another option is to purchase a short-term health insurance policy. This type of policy can provide you with coverage for a set period of time, typically 3 to 12 months. Finally, you could self-insure by setting aside money each month to cover your expected medical costs.
Conclusion
Health insurance is a vital part of life, but it can be expensive. By following the tips in this article, you can make sure that you are getting the most affordable health insurance coverage possible. First, shop around and compare rates from different providers. Second, consider your needs and make sure you are getting coverage for what you need. Finally, take advantage of any discounts or subsidies that you may qualify for. By taking these steps, you can be confident that you are getting the best possible rate on your health insurance.
