Cheap health insurance usually means for people the lowest monthly premium. The lowest cost plans are also the skimpiest plans. Anyone who gets sick and needs to use health care services will quickly understand cheap is not so cheap after all.
Affordable Health Insurance
The trick is to find affordable insurance that will protect you and your family from major medical expenses.
This means avoiding the cheapest insurance, where you can expect to have the highest out-of-pocket expenses.
How to find affordable insurance
It takes time and some work to find cheap yet good health insurance that will fit your situation.
In school ? Student plans
• If you’re in school, you may be able to enroll in a student health plan. This would meet the requirement for having coverage under the Affordable Care Act.
Stay on parents’ plan
If a parent’s health insurance plan covers dependents, you usually can be added to their plan and stay on it until you turn 26. It may not be free.
Your dad or mom pays extra unless there are other siblings and they are already paying for a family health insurance plan.
♦ Once you’re on a parent’s plan, in most cases you can stay on it until you turn 26. (Check with the plan to be sure. Some states and plans have different rules.)
Generally, you can join a parent’s plan and stay on until you turn 26 even if you:
• Get married
• Have or adopt a child
• Start or leave school
• Live in or out of your parent’s home
• Aren’t claimed as a tax dependent
• Turn down an offer of job-based coverage
How to get added to a parent’s plan
• Job-based plans: Your parent can add you to their insurance during the plan’s yearly open enrollment period or during a Special Enrollment Period.
Your parent should check with the plan or their employer’s benefits department for details.
• Plans bought through the Health Insurance Marketplace: When a parent applies for a new plan in the Marketplace, they can include you on their application.
They can add you to an existing Marketplace plan only during the yearly Open Enrollment Period or Special Enrollment Period.
Under 30 – buying your own health insurance
You might be able to buy your own plan through the Health Insurance Marketplace. Pricing will be based upon your age and income.
• Because you are young your premium is lower. Because you are just starting to make money you may be eligible for savings based on your income.
• You may qualify for a premium tax credit to help cover some of the cost.
• Because you are under 30 you have the option of choosing a “Catastrophic” health plan.
These are not the best plans but if you are healthy they can provide protection for the worst-case scenarios.
Learn more about Catastrophic Health Insurance before deciding.
• Applying really isn’t as difficult as most people say. And it doesn’t take much time.
• It is quite possible you can find an affordable plan for $100 or less per month, with good benefits.
• One catch: If someone claims you as a tax dependent, you can buy a plan through the Marketplace but you won’t qualify for the premium tax credit base.
Choose not to buy health insurance
This not a good option.
The Affordable Care Act requires that everyone have Minimum Essential Coverage (MEC) or pay a fee (penalty).
The penalty is either a flat amount or a percentage of household income, whichever is greater.
Learn how the penalty is calculated and view examples at Obamacare Penalty.
Update: December 22, 2017
President Trump signed into law a Republican crafted tax bill. The bill will eliminate the penalty for not buying health insurance starting in 2019.
There is an exception to this requirement. It is called a Hardship Exemption.
Hardships are life situations that keep you from getting health insurance.
If you qualify for a hardship exemption, you don’t have to have health insurance or pay a fee (aka penalty) for the months the exemption applies.
Visit Hardship Exemptions to learn more.
Through an employer
If you are lucky enough to have health insurance through an employer you should consider that option.
Many employers pay a portion of the premium or negotiate better premiums than you could purchasing on your own.
♦ Group plans are usually more generous than individual plans that you might purchase through the Marketplace or off-exchange.
Also, keep in mind if your employer offers affordable health insurance then you will not be able to receive a premium tax credit under Obamacare.
Purchase health insurance on your own
Use the health insurance Marketplace
If you are self-employed or your employer does not offer affordable health insurance you should try to obtain health insurance through the Marketplace (also called the Exchange). Visit HealthCare.gov to learn more.
♦ It is only by applying through the Marketplace that you can have the chance of receiving a premium tax credit.
People commonly refer to this as a subsidy but it is really a tax credit.
♦ The premium tax credit can only be used to purchase a plan offered through the Marketplace. By using the tax credit you may able to purchase a better plan at a reasonable price.
• If your situation prevents you from receiving a premium tax credit, you may still purchase a plan offered through the Marketplace.
However, since you will not be receiving a premium tax credit you should also consider plans offered off the exchanges.
Go to insurance company websites
You will not be able to use the premium tax credit for any plans purchased off the exchanges.
♦ All the major the major insurance companies offer plans off the exchange.
Many of the plans differ both in benefits and cost to those on the exchange. You should compare these plans and premiums to ones on the exchange before making a decision.
You find this information by going direct to the major insurance companies’ websites.
Ask an agent
Many agents do give some good advice but there is a limitation when using an agent.
They may not want to spend the time showing you all the possible plans. They receive a commission and this often times influences them to direct customers to the plans that may not be the best for the customer but pays a better commission.
A number of websites promise to show you "all" plans in your area. This sounds convenient but it is unlikely they will show you everything.
Depending on your income, you might qualify for Medicaid. Medicaid and the Children’s Health Insurance Program (CHIP) provide free or low-cost health coverage to millions of Americans, including some low-income people, families and children, pregnant women, the elderly, and people with disabilities.
Update: January 22, 2018
Congress just passed a government funding bill which includes a six year extension for CHIP.
October 2, 2017
Congress failed to renew the funding for Children's Health Insurance (CHIP). CHIP provides low-cost insurance to 9 million children. Unless Congress acts the program will expire when the current funding runs out.
The program is primarily funded by the federal government with with states chipping some. The federal government's portion was around $13.6 billion in 2016.
Funding renewal was ignored during the fight over repealing Obamacare. It is now worried that funding for CHIP will become a casualty of tax reform fights.
♦ Most people do not know what Medicaid is. It is not welfare.
It is intend as a form of social safety net to provide health and long-term care assistance to low income people. It involves federal money but it is administered by each state.
It currently provides health insurance to roughly 60 million Americans -- nearly one-fifth of the U.S. population.
♦ The passage of the Affordable Care Act encouraged many states to expand their Medicaid programs to cover more people.
The Federal government promised more money to help cover the expansion. However, some states refused to expand their programs.
Even if your state hasn't expanded Medicaid and you don’t qualify based on income alone, you should apply to see if you qualify.
Each state has coverage options that could work for you – particularly if you have children, are pregnant, or have a disability.
♦ There’s no limited enrollment period for either Medicaid or CHIP. If you qualify, your coverage can begin immediately, any time of the year.
Apply for Medicaid and CHIP two ways:
• You may apply through the Health Insurance Marketplace, at the same time you will find out if you qualify for a premium tax credit instead.
• You may apply directly to your state Medicaid agency.