The Affordable Care Act (ACA), also known as ObamaCare, has expanded health insurance options for low income individuals around the country. Gaining health insurance when unemployed, however, is sometimes confusing. The health insurance or financial assistance an individual will qualify for will depend on primarily on income level. During periods of unemployment, income may come from a variety of sources, and many of those sources should be reported when applying for coverage through the Health Insurance Marketplace.
The tax subsidies to reduce the cost of health insurance are available to people and families who make between 100% and 400% of the federal poverty level. The federal poverty level in 2013 was $23,550 for a family of four. In addition, individuals and families earning between 100% – 250% of the federal poverty level will be eligible for assistance with insurance cost-sharing, such as deductibles and copayments.
What Counts as Income for the ACA?
When applying for insurance through the new marketplace, estimated income from sources other than from a job should also be reported. A spouse’s income and the income of any dependents that make enough money to file a tax return should also be included as part of household income. Unemployment compensation also counts as income, as do Social Security payments that are not Supplemental Security Income (SSI) and alimony.
Items that should not be included as income include child support, SSI, gifts, worker’s compensation, veteran’s disability payments, and proceeds from loans. For more specific information on what income should be reported on an application in the new marketplace, visit the Healthcare.gov Household and Income site.
If you are actively looking for work and aren’t sure when and whether you may find employment within the calendar year, it’s important to make your best estimate. If you apply for a tax credit to help cover the cost of a marketplace plan and then make less than expected, you may qualify for lower costs. If so, you’ll be entitled to a refund. Conversely, if you make more than expected, you may have to pay back some of the tax credit you received. Any changes in income should be reported to the Marketplace so that the amount of any tax credits may be accurately adjusted.
The Effects of Medicaid Expansion
If you live in a state that is expanding the eligibility requirements for Medicaid, you’ll have another coverage option if you don’t earn enough to qualify for a tax subsidy. In states that are expanding eligibility, Medicaid will be available to anyone earning up to 133% of the federal poverty level beginning January 1, 2014. Be sure to fill out an application in the appropriate marketplace for your state, because it will be considered for both Medicaid and federal assistance.
Even if your state is not expanding Medicaid eligibility, it is a good idea to apply because you may still qualify for coverage under existing rules. Unfortunately, with some states choosing not to expand Medicaid eligibility, some citizens may find that they do not qualify for federal credits in the marketplace and nor qualify for Medicaid health insurance coverage.
If Insurance is Still Unaffordable
In some cases, you may not qualify for financial assistance with health insurance and it may be unaffordable. In order to avoid a tax penalty for going without health insurance, these individuals should apply for an exemption. Healthcare.gov has a site dedicated to understanding exemptions.
In addition, the ACA has expanded funding for community health centers, which provide primary care for free or on a sliding scale based on income. To learn more, visit the Community Health Centers site on Healthcare.gov.
The goal of ObamaCare is to make health care as affordable for as many Americans as possible. When you are unemployed it can be difficult to acquire health insurance. However, with the marketplace subsidies and with many states expanding Medicaid eligibility, affordable health care is more accessible than it has ever been.