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Things You Can Do If You Lose Your Obamacare Subsidy
After signing up for health insurance, some people are learning they no longer qualify for their Obamacare subsidy. They might have earned more than they anticipated last year or the criteria to qualify may have changed. Don’t despair – if you still want health insurance there are ways to make sure you have coverage after losing your subsidy.
Here are seven options to consider if you face this situation.
1. Buy Insurance on a Government Exchange without an Obamacare Subsidy
Your first option is to buy insurance on a government exchange (either the federal or a state marketplace) without an Obamacare subsidy or a premium tax credit. If you sign up for coverage through the Marketplace, you can choose not to take the tax credit in advance, meaning you pay the full cost of your premiums each month. Then, if you are eligible for the tax credit you could apply for it at the end of the year in your tax return.
2. Buy a Short-Term Insurance Plan
A short-term health insurance plan has some drawbacks – it is not required to cover the essential health benefits mandated by the Affordable Care Act and generally does not cover pre-existing conditions. However, it’s a quick, easy, flexible and cheaper option than paying for an ACA plan. While deductibles can be high (as much as $10,000), premiums are usually very low (as low as $20/month).
If you are generally healthy, between jobs, or expect to receive insurance in the future (from an employer or the government), then this plan might be right for you.
Note: not all states allow insurers to offer short-term insurance plans.
3. Get Catastrophic Health Insurance
If you’re relatively healthy but worry over the “what if everything goes wrong” scenarios, then consider Catastrophic health insurance.
Catastrophic health insurance is available to anyone under the age of 30 or to any household that qualifies for a hardship exemption. The hardship exemption kicks in if health insurance would count for over 8.05% of your income. If you make under 400% of the poverty level (and, in some cases, if you make just over the 400% of the FPL), then you probably qualify for the hardship exemption.
Premiums are very low for these plans but deductibles are extremely high ($8,150). They cover the same essential benefits as other ACA plans. That means this plan still covers all your preventative care before you pay your deductible; however, the rest of your care is completely on you until you meet your deductible. Once you do meet your deductible (which would probably happen in your “worst-case-scenario”) then your insurance would cover 80% to 100% of your medical bills.
4. Go for an Accident-Only Plan
Accident-only insurance is a supplemental insurance plan that’s an option for many who can’t afford an ACA plan. An accident-only plan doesn’t cover the ten essential benefits but does cover qualified accidents such as the breaking of limbs, paralysis or burns. So, if you sustain a major injury specifically covered by the policy, these plans will pay a lump sum that can be used to cover your expenses. These plans have extremely low premiums ($15 to $50 per month).
5. Purchase a Critical Illness Plan
A critical illness plan is similar to accident-only coverage in that it is a supplemental plan that does not cover the essential benefits guaranteed by the Affordable Care Act. However, instead of covering severe accidents, a critical illness plan covers major illnesses such as cancer, heart attacks and strokes. These plans pay a lump sum generally ranging from $5,000 to $100,000 that can be used to pay your medical expenses. The price of these plans depends on your age but usually varies from $50 per month to $150 per month.
6. Go to a Christian Health Ministry
An alternative to traditional health insurance is paying for a membership at a Christian Healthcare Ministry. These ministries are not insurance companies, they are non-profit religious organizations. You pay a monthly fee to the ministry and usually cover many of your preventive and regular healthcare fees out-of-pocket (like annual physicals). However, for larger fees such as hospital visits, the organization will pool together money from all those in the ministry and help cover costs.
It’s becoming increasingly common for people to turn to faith-based groups for health coverage; as of 2018 a million people relied on such organizations for coverage.
Also remember that because these are faith-based organizations, healthcare costs that are morally opposed to the group’s values, such as pregnancies out of wedlock, may not be covered.
7. Risk It and Pay Out-of-Pocket
This choice has inherent and obvious risks attached. It’s impossible to know when illness or injury may strike so you could end up with serious costs if you lack insurance. However, if you are a relatively healthy individual and determine that your annual healthcare costs are lower than the annual deductibles on these plans, then it’s a risk you might decide to take.Also, if you are uninsured and an illness or injury causes unexpected health care costs, you do have options to try to manage costs. You can try to negotiate your medical bill or hire a medical bill advocate to do it for you. You can also try taking out a personal loan or crowdfunding your healthcare.
