For decades, cost has been a major barrier that prevented tens of millions of Americans from accessing health insurance. High costs forced millions of families to go without the health coverage they needed, or to settle for subpar plans that failed to cover essential health care services. But now, thanks to the Affordable Care Act (ACA), financial help is available to help families afford quality, comprehensive health insurance, and you can access it through the website HealthCare.gov.
The ACA makes coverage more affordable by reducing the cost of premiums and by lowering the amount that consumers have to pay out-of-pocket through cost-sharing. For those not familiar with the terms “premium” and “cost-sharing”:
- A premium is a monthly payment, just like your electric bill, made to your health insurance company.
- Cost-sharing is the amount you pay for using a covered health care service, like going to the doctor or filling a prescription. For example, you might be required to pay a $20 co-pay to visit a doctor. This co-pay is a type of cost-sharing. Thanks to the ACA, many preventive health care services, like cervical cancer screenings and mammograms, are covered without any cost-sharing at all.
The Affordable Care Act provides two types of financial help to make health insurance coverage more affordable: premium tax credits and cost-sharing assistance.
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Premium tax credits reduce your monthly payment for your health insurance, so that you pay less for your coverage. Individuals and families with annual incomes between 100 percent and 400 percent of the federal poverty line are eligible for premium tax credits. (For an individual, that’s an income between $11,490 and $45,960. For a family of four, that’s an income between $23,550 and $94,200.). If you think you might be eligible for a premium tax credit, you can get an estimate by plugging some basic income information into the Kaiser Family Foundation’s calculator.
The amount of your premium tax credit is determined on a sliding scale. Meaning, you’re eligible for a larger tax credit if you make less money and a smaller tax credit if you make more money. For example, a family of four with an annual income of $40,000 per year would be eligible for a larger tax credit than a family of four with an annual income of $50,000 per year.
Research indicates that many families purchasing coverage in the new ACA marketplace are eligible for premium tax credits. In fact, it’s estimated that more than half of young people will pay less than $100 a month for health coverage!
- Cost-sharing assistance reduces the amount of money you need to pay out-of-pocket when you go to the doctor or fill a prescription. Cost-sharing assistance ensures that low-income families don’t delay or forgo care because they can’t meet their plan’s cost-sharing requirements. For example, cost-sharing assistance can reduce the cost of seeing your doctor from $45 for a visit to as little as $3. Individuals and families with incomes up to 250 percent of the federal poverty level ($28,725 for an individual and $58,875 for a family of four in 2013) are eligible for cost-sharing assistance. The amount of cost-sharing assistance you’re eligible for is also determined on a sliding scale, just like premium tax credits. Eligible individuals or families must enroll in a Silver-level plan through a health insurance marketplace in order to receive their cost-sharing subsidies. (For more information about the types of plans offered in the marketplace, check out our Choosing a Health Plan 101 consumer guide.)
If you’ve been hesitating to buy coverage because you think you can’t afford it, check Healthcare.gov or call the help line at 1-800-318-2596 to find out if you might be eligible for financial help. The ACA was designed to make coverage more affordable for Americans. No matter what your income is, you should be able to find a plan that meets your health care needs and fits your budget.
And remember: Make sure to enroll by March 31st. It’s easier than you might think to sign up for a plan. Visit HealthCare.gov. Input some basic information, like annual income and the number of people in your family. Choose a health plan and pay your premium. Then, you’ll have peace of mind of knowing that you and your family are covered!
