How to Help Low-Income ACA Clients
Health insurance is a complex system that can be difficult for those who are new to it to navigate – that’s where you come in. It is difficult for low-income clients to know where they should even start to look for health insurance they can afford – the government? An employer? Or from a private insurance company? Today we’re going to help you understand the best ways you can help low-income clients.
A crucial point to make sure they understand right off the bat is that health insurance is rarely ever free or low-cost. Anything that advertises to them as a free or low cost means one of two things:
- They can receive a subsidy that reduces the monthly premiums (most often applicable to Silver Metal Tier plans). For clients who qualify, this is usually a great option.
- The benefits are reduced, and they will not receive comprehensive coverage. This could be appealing to them at first glance but could leave them with high out-of-pocket costs if they are faced with a significant medical claim.
Medicaid is a state-based program that provides comprehensive government health insurance to low-income individuals. For those who qualify, it is free, and there are usually no monthly premiums and minimal cost-sharing. In most states, people under the age of 65 can be eligible if their household income is not more than 138% of the federal poverty level. Be sure to check with the clients’ state before letting them know they qualify for Medicaid. Let them know they can apply for Medicaid through their state’s health insurance exchange.
The Affordable Care Act (ACA) provides subsidies to make health care coverage more affordable for people with modest incomes and make buying and using it easier for those with low incomes. These are designed to help people who buy their health insurance – but this is a small percent of the population. (Most people get coverage from their employer or through some form of government assistance). Typically, the cap for subsidies is 400% of the Federal Poverty Level, but due to the American Rescue Plan passed in 2021 – there is no income limit as of 2021 & 2022. Click here to download more information on the American Rescue Plan. For these two years, subsidies are designed to ensure no one buying a plan through the Marketplace is paying more than 8.5% of their household income for the benchmark plan.
Suppose their income is between 100% and 250% of the federal poverty level. In that case, they will be eligible for the subsidy and additional government assistance to pay for deductibles, copays, and coinsurance when using a Marketplace plan. This is known as a cost-sharing subsidy.
Short Term Health Insurance
Short-term plans cost less than comprehensive insurance and are often an attractive option for those looking for temporary coverage – such as someone in between jobs who want to ensure they have coverage. Short-term plans can be sold – in some states – for terms up to 364 days and can be renewed for up to 36 months. Although it can be a low-cost option – it is not comprehensive health insurance. These plans are not held to the same regulations as ACA plans, and it is essential to ensure your clients know that. Some plans cap their benefits, leaving those who are seriously ill or injured with high out-of-pocket costs. They also do not require the coverage of the essential health benefits, and many do not cover maternity care, mental health, or prescription drugs. They also often exclude coverage for those with preexisting conditions.
For more help and options for plans for your low-income clients, contact Agent Pipeline today at 800.962.4693!