Affordable Health Insurance 101
We all struggle to understand health insurance, which makes finding good, affordable coverage pretty difficult for most people.
However, you don’t need to keep struggling. We’re here to walk you through some of the most cost-effective healthcare plans available, what they cover and how to get them.
So buckle up and get ready for a crash course in affordable healthcare.
Medicaid vs Medicare
Let’s start with one of the most commonly confused healthcare programs out there – Medicare and Medicaid.
Find ways to get help paying for medical costs through government programs like Medicare, Medicaid and CHIP.
Medicaid helps give more than 7 million low-income and disabled Americans health insurance coverage. It is funded by both the federal and state governments, which is why some requirements may vary from state to state.
If you qualify for Medicaid, you can receive FREE or low-cost health insurance that can help you pay for long-term conditions as well as basic check-ups and other medical needs.
The two standard requirements you need to meet to qualify for Medicaid are:
- Meet the income requirements – Typically, applicants need to earn less than 133 to 138 percent of the federal poverty average for your state. This is based on your Modified Adjusted Gross Income (MAGI), and calculated by the state provider you apply through.
- Meet the residency requirements – To be eligible for Medicaid, you must be a legal resident of the United States and live in the state you are applying in.
As a reminder, some additional requirements may apply depending on your state, but the income and citizenship requirements must always be met in order for you to qualify.
If your income does not meet the requirements for Medicaid but you have a lot of medical expenses, your state may be able to label you as “medically needy” and you can still receive some form of help from the Medicaid program.
Pregnant women and children may also be eligible for a branch program of Medicaid called CHIP, which stands for the Children’s Health Insurance Program.
CHIP is designed to help cover at-risk children and mothers who may not qualify for Medicaid but cannot afford private health insurance.
CHIP may sometimes fully fund a child’s insurance coverage, and other times it can provide a low-income option for women and children. The amount of coverage a participant receives depends on both their financial situation and the state they live in.
For example, some states cover pregnant women, and some do not. Some states cover at-risk children as well as their parents, and some states do not.
The most important thing to remember about CHIP, Medicaid and other programs that are run by state, is that all qualifications may be subject to some change between states.
We always recommend checking with the health insurance providers in your state to make sure you know all your options.
To learn more about government health insurance programs, click here.
So, now that we’ve talked about Medicaid, let’s talk about Medicare and clear up any confusion between the two programs.
Medicare is a federally-funded low-cost health insurance program available to people who:
- Are 65 years of age or older.
- Are younger than 65 but have a disability.
- Have certain terminal illnesses.
Medicare also requires applicants to have worked at least 10 years in the United States in order to qualify.
So, what does Medicare cover? Well, that’s where it can get a little tricky. You can choose between Original Medicare or Medicare Advantage, and then after that, you have to choose which parts of Medicare you’re interested in or what plan is right for your medical needs.
To make this a bit easier to understand, we’ve broken down each part of Medicare below:
Original Medicare includes Part A and Part B plans, with the option of adding Part D separately.
Medicare Part A is also known as Hospital Insurance because it covers different types of in-patient care, like:
- Extended hospital stays.
- Nursing home care.
- Hospice care.
- Certain types of at-home care.
Medicare Part B, or Medical Insurance, covers out-patient care like:
- Doctors visits.
- Preventative health screening and lab work.
- Necessary medical equipment like wheelchairs.
- Most types of home health care.
Medicare Part D is prescription drug coverage. It’s usually offered through private insurance companies and can cover most, if not all, of your prescription drug costs as well as shots and vaccines.
However, even with parts A, B and D combined, there are still medical services that aren’t included in Original Medicare, like vision and dental insurance.
Everything You Need to Know About Medicare
Get information on all the parts of Medicare and see how they can help you.
To remedy that, the federal government created Medicare Supplement Insurance, more commonly known as Medigap, to fill the “gaps” in Original Medicare by providing supplemental health services and making out-of-pocket costs more affordable for participants.
Now, this seems like a lot of different parts to keep track of, right? A lot of people thought so, too, and that’s why we eventually got Medicare Advantage, which we’ll talk about next.
Medicare Advantage, also known as Medicare Part C, is all-in-one Medicare coverage. It combined Medicare Part A, B, and C, as well as Medigap, so that those who qualify can have their healthcare needs met with just one plan.
Unlike Original Medicare, Medicare Advantage can be provided by Medicare-approved private insurance companies, which is what makes them more customizable than the Original Medicare plans provided by the federal government.
You can choose between different companies and different plans so that you have a better chance to get the type of coverage that suits your medical needs best.
Medicare Advantage also greatly reduced out-of-pocket costs because you don’t have to pay for additional plans to fill the gaps your original plan doesn’t cover.
However, Medicare Advantage may have more limited providers, since private companies usually require you to use their in-network providers whereas Original Medicare lets you use any provider that accepts Medicare.
Whichever coverage type you end up choosing, both Original Medicare and Medicare Advantage provide extremely reduced healthcare premiums and can really help you save on medical costs as you age.
You can qualify for both Medicare and Medicaid. If you have dual eligibility, your Medicaid assistance can help cover your Medicare premiums so you’re completely covered.
Other Ways to Reduce Costs
So, what happens when you make too much money to qualify for Medicaid and you’re too young for Medicare, but you’re still struggling to afford health insurance?
That’s where the additional healthcare options below come in.
Health Insurance Subsidies
First, we have health insurance subsidies, which provide struggling individuals and families who do not meet the income requirements for Medicaid with a sum of money from the government that they can use to help pay their healthcare premiums.
You can find out if you’re eligible for a subsidy by signing up for an insurance policy on the federal healthcare marketplace and you’ll be able to know right away if you qualify for a subsidy.
Usually, the requirements will be based on your household size, income level and the state you live in, while the amount of your subsidy will depend on your earnings and the insurance plan you select.
Find out how government subsidies can help you cover healthcare costs.
The name catastrophic coverage may seem a little extreme, but it’s basically a type of insurance only meant for emergencies. It covers the bare minimum like some preventative care, but it is mostly meant to help pay hospital costs in case of emergencies.
With catastrophic insurance, you have very low premiums and a high deductible since you will be using very little medical services.
Insurance companies typically only grant catastrophic insurance to individuals younger than 30, but you can also get a hardship exemption if you’re over 30.
A “hardship” in this case, can be any financial hardship that does not allow you to afford standard health insurance. These include, but are not limited to:
- Experiencing homelessness.
- Being affected by a natural disaster.
- Having substantial medical debt.
- Escaping domestic violence.
- Covering costs for a death in the family.
Catastrophic insurance is also not meant to last forever, and is meant to be a quick fix when you can’t afford a standard insurance plan, like the option we’ll be talking about next.
Short-term Health insurance
As the name implies, short-term health insurance is meant to only provide coverage for a short amount of time.
The advantages of short-term insurance is that you can apply at any time of the year, not just during open enrollment, and they have low premiums.
This is extremely helpful if you’re in-between jobs and need insurance until you can find a new employer that will provide you with full coverage again, or if you need to change coverage for any reason and can’t apply for a full plan until December.
Short-Term Health Insurance
Learn how you can apply for short-term health insurance at any time of the year.
However, these plans usually do not cover everything a standard plan will since they are not meant to be permanent, so that’s something to keep in mind when considering short-term health insurance.
Student insurance is something that can be offered by a college or university, as well as some private insurance providers.
If it’s an option provided by the school you attend, it is often limited to the medical services available on campus, but you will pay very low premiums.
Private insurance companies usually offer healthcare plans targeted at students to individuals between 17 to 29 years of age. Like school plans, they will have low premiums, but high deductibles and copayments, which is something to keep in mind.
There are many companies, like United Healthcare, that offer cheaper plans to students and other healthcare options that can help you save money.
You can check out more great insurance companies below!
Best Insurance Companies
So, now that we’ve covered the basics of what types of healthcare are out there, where should you get it?
We’ve provided a short list of some of the best health insurance companies you can check out to find affordable and worth-while plans.
Aetna – Aetna provides some of the best coverage for those who qualify for Medicare Advantage. It also has an A rating for excellent creditworthiness and affordability.
Blue Cross Blue Shield – If you are looking for an affordable health insurance plan that can be accepted most anywhere, Blue Cross Blue Shield has the best nationwide coverage and is accepted by almost 90% of doctors. It provides full coverage in all 50 states, making it one of the most convenient and accessible health insurance providers.
Cigna – If you are interested in health insurance that’s a bit more global, Cigna has got you covered. It provides some of the best and most reasonably priced health insurance solutions for global healthcare, so you can receive coverage in the United States, United Kingdom, New Zealand, Thailand, South Korea and more!
Free and Low-Cost Health Plans
Learn how you can navigate low-cost health insurance plans from the government.
Humana – Humana is one of the best-rated Medicare health plans available and provides great umbrella coverage, which means it helps fill in a lot of the gaps in Medicare coverage. They have very low monthly premiums and provide great HMO plan options.
Kaiser Foundation Health Plan – The Kaiser Foundation Health Plan is a non-profit healthcare organization that is privately owned and provides reasonably priced health plans for those who are not traditionally insured by the public sector, like those who are self-employed, studying between jobs, etc. They provide some of the best HMO, or in-network, healthcare plans.
United Healthcare – Another top-rated healthcare company, United Healthcare provides many easy healthcare solutions online. They have some of the most easy-to-navigate health insurance portals and their online trouble-shooting services make it easy to solve issues without having to call and spend hours waiting on the phone. Its PPO plans also received an A rating for affordability and reliability.
We know healthcare can be difficult to navigate, but we hope this article has provided you with some helpful insights.
If you’d like to learn more about healthcare, click on the article below!
Medicare for People Under 65
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