Could you image if you needed a life saving surgery that cost $500,000 and you didn’t have health insurance? Where would you get that money from? Most employers provide health insurance and employers that have over 50 full-time employees are required to provide a health insurance plan to their employees. People age 65 and older have Medicare. But what about everyone else. Those who are self-employed, those who are retired but not yet 65, or those who’s employer don’t provide insurance. Having at least catastrophic coverage is very valuable to your financial security. Health insurance is part of Financial Wellness and not having any is like sitting in the middle of a road hoping to not get run over. Especially with the subsidies (reduction in healthcare premiums) available to reduce the monthly premiums for low and middle class families. Even if you think you make too much income to get a subsidy, I highly suggest still looking at what is available and the costs. I think you’ll be surprised at how much you can earn and still get substantial assistance with healthcare premiums. Make a decision based upon real, researched facts. Not assumptions. Here’s how.
Healthcare Exchange:
The Healthcare Exchange is a government sponsored website to view the healthcare plans and benefits available to you, including the cost. Whether you’re looking to get onto Denali KidCare because you’re low income with children (including pregnant), need to apply for the low income program Medicaid, or whether you make good money but don’t have employer provided health insurance, go to Healthcare.gov.
When you can apply for health insurance:
You will have to wait until the open enrollment period to apply to have health insurance coverage start as of January 1st . Open enrollment starts November 1st to December 15th. The exceptions to this open enrollment period are if you qualify under a special enrollment exception or have very low income.
If you fall under the very low income category or the low income with children (including pregnancy) then you will have the options to apply at Healthcare.gov to start, or change, your health insurance through Medicaid without having to wait for open enrollment.
If you qualify under the Special Enrollment then you can start your new healthcare plan almost immediately. Special Enrollment exceptions are major life events that include losing health insurance coverage due to:
- Loss of a job
- Divorce
- Moving
- Getting married
- Having a baby
- Adoption
Not sure if you qualify for special enrollment? Then go to this Enrollment Screener.
And be sure to keep this in mind, you must reapply EVERY YEAR to maintain having health insurance coverage through the Healthcare Exchange.
Browsing plan options and subsidies:
If you want to look through the available healthcare plans, and how much the plans will cost you, go to See Plans & Pricing.
Once here, type in your zip code and the screener will ask you about your household demographics. I highly recommend you take the few minutes to fill out their four questions so you can get an accurate quote. The below pictures show all of the questions they will ask. (1) Age (2) sex (3) if you qualify for any programs, and (4) your estimated household income for the upcoming year. Don’t miss that last part. Your expected household income for the upcoming FUTURE (not the past) calendar year. So you’re estimating your household income for 2023. It pays to be accurate when inputting the upcoming year’s household income. You will get a Form 1095-B at the end of the year that shows how much subsidy (reduction in healthcare premium) you were given.
On your 2023 tax return the IRS will compare the subsidy given to you (which was based upon the estimated household income you stated on your application) with how much you were supposed to be given (based upon the actual income you made on your 2023 year tax return). The government will return or take back the difference on your 2023 tax return.
How do I estimate the upcoming year’s income accurately?
Start by getting out your 2020 or 2021 tax return and looking at your household’s adjusted gross income. This is on Form 1040 line 11. If your income varies widely from year to year you will have to create estimate based upon wages, tips, dividends, unemployment income, etc.
The HealthCare Exchange has a great article detailing how to estimate the upcoming year’s income here.
Example:
Under the ‘See plans & prices’ page I put in a female person with a 99501 zip code, single person household, age 60, with an annual household estimated income of $100,000. They receive a subsidy of $856 a month. So if they choose a health care plan with a premium of $1,000 monthly the out of pocket cost monthly for the premium would only be $144 ($1,000-$856). Out of the 16 plans available to this Example person in Alaska, seven of them would cost less than $350 a month for the monthly premium out of pocket.