As its name suggests, the Affordable Care Act (ACA) is supposed to help consumers buy health insurance without breaking the bank -- and subsidies play a big role in keeping costs down.
Consumers with family incomes of 100 percent to 400 percent of the federal poverty level -- or about $11,490 to $45,960 for a single person in 2013, according to HealthCare.gov -- might be eligible for tax credits that can lower monthly premiums. But consumers who make more or less probably won’t qualify for subsidies.
So, what if you make too much (or too little) to get a subsidy? Here are six ways to get coverage without emptying your wallet.
6 ways to save money on Obamacare
1. Consider a lower-level plan.
In the health insurance marketplaces in each state, plans are offered at four levels. The highest level, platinum covers about 90 percent of health care costs and the lowest level, bronze, covers about 60 percent. Here are two lower-level plan options:
- A bronze plan - will typically have lower premiums than higher-level plans. However, policyholders will pay more in out-of-pocket expenses when they need medical care, says John Rother, president and CEO of the National Coalition on Health Care.
If you're fairly healthy, you can save money with a bronze plan, says Tom Lomazzo, partner and senior vice president of The Stratford Financial Group, an insurance consulting and brokerage firm in New Jersey. "No one really knows for sure what their health will be like in the future, but the past is a good indicator," Lomazzo says.
If you’re going to opt for a bronze plan, Rother says you should make sure you have enough in savings to pay thousands of dollars in out-of-pocket expenses in case you do get hit with a serious illness or injury. "You need to have cash on hand," he says.
- A catastrophic plan - is available for those under age 30, or for older Americans who qualify due to financial hardship. The premiums will be less than for a bronze plan (although the out-of-pocket expenses will be higher). Like other coverage, catastrophic plans offer free wellness doctor visits, along with no-cost preventive services, such as immunizations, blood pressure testing and depression screening. Aside from these services, you typically pay all of your medical care until you reach the deductible, which could be more than $6,000.
Choose carefully because you'll have to wait until the next open enrollment period to switch, Rother says: "Once you pick a plan, you're locked in for the year."
For any plan you're considering, it's important to look at the out-of-pocket maximum, the most you'd have to pay in one year, Lomazzo says: "That's the most important number."
2. Stay on a parent's plan.
Young Americans -- who many experts say are more likely than older consumers to get hit with higher premium costs under the ACA -- also have the option of staying on Mom or Dad's plan through age 26. Whether this is a better option than buying your own insurance depends on how much dependant coverage costs on the parent's plan, the level of coverage offered and your health status, Lomazzo says.
For example, he says if you have a chronic illness and the coverage under your parent's plan comes with high out-of-pocket expenses, you might want to consider buying your own plan.
3. Find a way to reduce your income.
If you make just a little too much to get a subsidy, finding ways to reduce your adjusted gross income -- such as contributing more to a retirement account -- could help you qualify for a tax credit, says Chris Huntley, president of Huntley Wealth Insurance Agency, in California.
As an example, he ran numbers for a family of four in California who wouldn't qualify for a subsidy with an income of $95,000. If they could reduce their adjusted gross income by $5,000 by putting away more for retirement, they'd shore up their financial future, save on income taxes and also possibly get a subsidy of more than $700 a year. "It's not going to help them cash-flow wise," he says, since they have to save more, but it could be an overall smart financial decision. He recommends playing with premium estimator tools to see what happens if you reduce your income a little. He also recommends meeting with a tax or financial professional for advice.
4. If you make too little to get a subsidy, apply for Medicaid.
Because some states chose not to expand Medicaid under the ACA, some consumers with household incomes under 100 percent of the federal poverty level will not qualify for a subsidy, nor will they qualify for Medicaid. If you can’t get Medicaid or afford health insurance, you might need to seek low-cost or free care at a local community health center.
5. Shop outside the marketplace.
In addition to shopping in your state's health insurance marketplace, you can shop elsewhere to see if you find a better deal. There might be plans that are not on the marketplace in certain states, Lomazzo says, adding that you should ask for the summary of benefits for any plan you're considering buying.
6 . Get help from a pro.
An expert can help you find a plan that fits your budget. The ACA offers help from navigators, who are specially trained to provide aid with the health insurance shopping process. HealthCare.gov offers a search tool for finding local help.
You can also contact an insurance agent or broker, says Amy Bach, executive director of United Policyholders, a nonprofit that helps consumers with insurance issues.