It’s that time of year when I really start to hear things like, I don’t make enough money to get insurance, and I don’t qualify for Medicaid. The Affordable Care Act was originally designed to help this issue, but with many states not expanding Medicaid, and with lawmakers steadily chipping away at the ACA, I thought I’d write up a little article on a potential way for those with low income to have insurance within this broken system.
Disclaimer: I’m not a lawyer, and this isn’t legal advice. I’m including links to the information that I base this article on.
The ACA is great for optimistic self-employed people with little to no income, who don’t qualify for Medicaid, because coverage is based on your estimated yearly income for the year you’re applying for insurance, not on what you made this year or last year.
Read these two pages to understand more:
https://www.healthcare.gov/income-and-household-information/how-to-report/
The problem for people with little to no income, is they fall below the income requirement for ACA, but don’t qualify for Medicaid (for a variety of reasons, but including the fact that they might live in a state that was stupid and didn’t expand Medicaid coverage).
Luckily you just have to estimate that this next year you will make enough to qualify for ACA insurance, and subsidies. For those making just enough money to get the maximum subsidies, often the out of pocket cost is around $25 a month. While there is a tax penalty for underestimating your income, there is no penalty for overestimating your income. I’ve frequently observed that optimistic people who start new businesses think they will make more money than they actually do, the first couple of years.
http://obamacarefacts.com/questions/what-happens-if-i-overestimate-income-for-tax-credits/
http://obamacarefacts.com/advanced-tax-credit-repayment-limits/
How do you know how much income you need to estimate you’ll make this year to qualify for ACA insurance and the maximum subsidies? The Kaiser Foundation has a wonderful calculator you can use to see if you qualify, and what your estimated subsidies and premiums will be, state by state. An estimated minimum income starting around $13,000 gets you into the maximum subsidy range.
For those people underemployed, or unemployed – start a small business. Place an add on CraigsList for housecleaning, lawn care, etc., and print a few flyers. Keep track of your miles, educational expenses, business supplies, etc. You don’t have to incorporate, but showing the start of your business is good, so get a stack of business cards from vistaprint for $7.99, and keep your receipt for both a tax write off, and to show your start of a new business.
Then run the calculator, and see what your totally income/“business income goal” needs to be this year to qualify for ACA insurance subsidies. Use that number as both your income goal, and to file as your estimated income on the healthcare marketplace.
Open enrollment for ACA insurance closes December 15th. Go to Healthcare.gov to get started.
Enjoy your insurance!
-Thomas Easley