If your income is too high to qualify for Medicaid, you can buy insurance through the Health Insurance Marketplace. Each state has flexibility in setting their income eligibility guidelines for Medicaid. Based on the state you live in, your eligibility to buy insurance through the Health Insurance Marketplace will start at the income level you no longer qualify for Medicaid.
When you apply in the Marketplace, you will be asked for an estimate of your 2016 taxes. That estimate should be based on your previous years’ income adding or subtracting expected changes in your income or family size. For example, if you know you are going to be laid off for two months in the winter, or you know you’ll be having a baby in 2016, you can factor those changes into your estimated income.
Based on that estimate, you will find out what you qualify for in the Marketplace. There are a variety of savings you may be eligible for. For example, you may be entitled to a tax credit that can be used to lower your monthly premiums. The amount of the tax credit will be determined by your income and family size.
Estimating your future income accurately is essential. While the premium tax credit may be a huge benefit in the short term, if you inaccurately estimated your income, you may end up owing money at the end of the year. This is referred to as reconciling. When the year ends, you file your taxes, and your actual income is determined. If your actual income is higher than your estimated income, the tax credit will be reevaluated.
You may also qualify for savings on co-pays and deductibles based on your income and family size. These savings are offered to families that make too much for Medicaid but are still fairly low-income.
If you make too much money for Medicaid and too much money for a health savings plan through the Marketplace, you can still buy insurance through the Marketplace. You will pay the full price for that coverage, but all the plans sold through the Marketplace meet the 10 essential requirements set forth by the Affordable Care Act, so you won’t have to worry about paying a penalty for being uninsured.
There are a wide variety of plans that fit the 10 essential requirements to avoid a penalty, and they are not limited to health plans sold in the Marketplace. If you apply for a plan, but all the ones offered are too expensive, you can explore your other options including finding a place of employment that offers insurance or offers employees discounted insurance plans through a set provider.