Editor’s Note: Reviewed in December 2023 to update citation sources and ensure compliance standards.
Caught in the middle? If you are like millions of Americans, you do not qualify for Medicaid, but you also can’t afford Obamacare.
With or without an individual mandate that requires you to purchase health insurance, you know that you and your family really should have insurance protection. You need it to protect your financial health and your budget against the high costs of medical care—both everyday healthcare and unexpected accidents and illnesses.
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But there are affordable health insurance plans that may be just what you need for your family and your budget.
Short-term medical insurance (which can be available for nearly a year of coverage) and fixed benefit medical insurance plans provide options that are an affordable alternative and that can help meet your everyday medical care needs—assuring you’ll never miss out on healthcare because of a high deductible.
Medicaid for Some
Medicaid is a program that is jointly funded by states and the federal government. The actual program and eligibility may differ from state to state, but it provides a safety net for many low-income people.
People can qualify for Medicaid based on income, household size, disability, family status and other factors. When the Affordable Care Act (ACA) was enacted, states had the opportunity to expand Medicaid coverage, with the federal government picking up part of the cost.
- In the Medicaid expansion states, you can qualify for Medicaid based on your income alone, if your household income is below 133 percent of the Federal Poverty Level.
- The states that adopted Medicaid expansion over the years include Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nevada, New Hampshire, Nebraska, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Utah, Vermont, Virginia, Washington and West Virginia. Some states are still considering expansion.
- States that have not adopted Medicaid expansion include Alabama, Florida, Georgia, Kansas, Mississippi, South Carolina, Tennessee, Texas, Wisconsin and Wyoming.
- The Federal Poverty Level is a determining factor in Medicare eligibility. In addition, the 2024 Federal Poverty Level (FPL) is used to determine eligibility for premium tax credits and reduced cost-sharing amounts. Here are a few 100% of FPL amounts for 2024, based on household size:
- $14,580 for individuals
- $19,720 for a family of 2
- $24,860 for a family of 3
- $30,000 for a family of 4
- Up to $50,560 for a family of 8. Higher income amounts are set for larger family sizes.
There are many people helped by Medicaid, but there also are many people who are still struggling with the dilemma of how to afford health care and health insurance because they don’t fall into this income category, or they live in states that have not expanded Medicaid.
Obamacare—Increasing Costs and Lower Benefits
You may be thinking that Obamacare was supposed to take care of the affordability of health insurance and medical care. After all, the legislation was named the “Affordable” Care Act.
Many of the supporters of the ACA truly believed that it would not only increase access to health insurance but also stabilize premium costs. They thought the “affordable” part would come through increased competition that was expected with the federal government paying tax credits.
However, it hasn’t worked out that way; the Affordable Care Act has made health insurance affordable, mostly for those who can qualify for tax credits. For the rest of the U.S. population, monthly premiums are not in the family budget.
Increasing health insurance premiums.
As the ACA was rolled out over the last decade, health insurance companies struggled with the high claims costs for Obamacare policies and the failure to get the majority of younger healthy people to buy Obamacare policies and thus stabilize the risk pool.
Because of this and the specific mandated benefits included in Obamacare plans, monthly premiums skyrocketed. However, in March 2021, updated COVID-19 relief legislation named the American Rescue Plan Act extended eligibility for ACA health insurance subsidies to people buying their own health coverage on the Marketplace with incomes over 400% of poverty. Under the new legislation and extension, households spending 8.5% of their income on health insurance premiums were eligible for a financial subsidy. The American Rescue Plan extension is in place until 2025.
Lower benefits due to higher deductibles and out-of-pocket maximum amounts.
In an attempt to keep premiums from being even higher than they otherwise would be in order to cover all of the claims costs, insurance companies designed their Obamacare policies with higher and higher deductibles and higher and higher out-of-pocket maximums. The federal government has been consistently increasing the out-of-pocket limits that qualified health insurance policies can have.
Starting in 2014, the federal government, as part of the ACA, annually set out-of-pocket limits for Obamacare plans. These limits have increased significantly over the years:
- In 2014, the out-of-pocket limits were:
- $6,350 for an individual.
- $12,700 for a family.
- In 2024, the out-of-pocket limits are:
- $9,450 for an individual.
- $18,900 for a family.
By ACA’s own definition, Obamacare policies can be “unaffordable” if individuals and families do not qualify for a financial subsidy. High premiums and high deductibles combined can cost families many thousands of dollars each year BEFORE any insurance benefits are paid by the insurance plans.
This is why so many people are considering and purchasing other insurance coverage options now available to them.
Short-Term Medical Insurance for Nearly a Year
If you and your family are in good health, you have alternative options besides Obamacare. Short-term medical insurance offers you the opportunity to benefit from your good health with lower premium costs and a wider range of deductible choices.
These insurance plans are called “short-term” because they were developed to meet consumers’ needs when they were between traditional health plan coverage or were waiting for health insurance coverage to begin. However, they do provide an opportunity to have coverage to help protect health and financial wellness in up to a one-year time frame.
How is this possible? Unlike Obamacare plans, there are some medical questions and preexisting condition limitations. However, for healthy people, the savings can be significant.
Short-term medical insurance offers consumers the opportunity to purchase up to 364 days of coverage and even extended coverage beyond the initial policy (available in many states).
Short-term medical plans offer:
- Lower deductible options.
- Freedom to suse any doctors or hospitals, without having to stick with a specific network for coverage on some plans and; PPO network options on some plans, depending on your state.
- Plan choices that can include physician copays and additional coverage options for prescriptions.
Fixed Benefit Medical Coverage for Everyday Medical Needs
If you want to save money on monthly premiums and also receive coverage for everyday medical expenses, then zero-deductible, fixed benefit medical insurance plans may be right for you. Fixed benefit plans can also be a “bridge” for helping pay the existing deductible amount on your current health insurance plan.
This type of insurance provides fixed, cash benefits to you, triggered by specific medical events, such as doctor office visits, hospitalization, medical tests, surgeries, childhood immunizations and more. You receive the same dollar benefit, no matter what the facility charges, and without having to meet an upfront deductible.
You receive benefits to help pay for these types of medical costs—or to use the pre-determined money for any other expenses you wish.
Some benefit highlights include:
- Specific dollar amount payments triggered by covered services.
- Savings to you, if you use the large medical network provided, but not required.
- Benefits in the event of fractures, burns and dislocations.
- Discount prescription drug card.
- Mental health and substance abuse care included (where applicable).
These affordable insurance plans are a great fit for many individuals and families and help take the worry out of everyday medical care.
Don’t get caught in the middle
Obamacare is not always the best fit for all needs. So, if you don’t qualify for Medicaid, but you find that you can’t afford monthly high premiums and out-of-pocket costs of Obamacare Marketplace plans, there are other choices you can make.
Short-term medical insurance is an economical solution for healthy individuals and families, providing benefits at a budget-friendly monthly cost. Fixed benefit medical indemnity health insurance is focused on helping consumers pay for everyday medical care without having to meet a deductible out of their own pocket first.
No matter what your needs are today, there are insurance plans that can help you protect your financial future. Don’t remain uninsured just because you are caught in the middle by Obamacare.
