Haris Ashley
The cost of health insurance is a significant concern for many, with 63.2% of uninsured adults aged 18-64 citing unaffordability as the reason for lacking coverage. Medicaid is a federal-state program that provides free or low-cost health insurance to certain low-income individuals, including children, pregnant women, the elderly, and people with disabilities. Eligibility criteria vary across states, and adults' access is limited in states that have not adopted the ACA expansion. If you cannot afford private health insurance, understanding your state's Medicaid program and alternative financial aid options is essential.
| Characteristics | Values |
|---|---|
| Main reason for being uninsured | Lack of access to affordable health coverage |
| Medicaid coverage | Free or low-cost health coverage for low-income individuals, families, children, pregnant women, the elderly, and people with disabilities |
| Medicaid eligibility | Determined by state law and varies across states; eligibility for adults is limited in states that have not expanded Medicaid |
| Impact of unaffordable insurance | People without insurance are less likely to access care and more likely to delay or forgo it due to costs, leading to unaffordable medical bills and medical debt |
| Resources for unaffordable insurance | Premium tax credits, cost-sharing subsidies, health insurance subsidies, and state health insurance marketplaces |
| Factors considered for subsidized healthcare | Income, household size, overall income, average cost of health coverage in the area, and federal poverty line (FPL) |
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What You'll Learn
Income-based eligibility
Medicaid has been a lifeline for many, especially as the cost of health insurance continues to rise. In 2023, 63.2% of uninsured adults aged 18-64 cited unaffordability as the reason for lacking coverage. The rising cost of insurance premiums and out-of-pocket medical expenses disproportionately affects low-income families, making it challenging for them to afford healthcare without assistance.
To address this issue, the Affordable Care Act (Obamacare) has evolved to make healthcare more accessible for low-income households. Additionally, the American Rescue Plan Act (ARPA) expanded eligibility for health insurance subsidies and tax credits, making coverage more affordable for those who previously struggled to obtain it. These subsidies and tax credits can significantly reduce the financial burden of health insurance, making it more accessible to those who need it most.
When it comes to income-based eligibility, the government considers an individual's or household's income relative to the federal poverty line (FPL). Those with incomes between 100% and 400% of the FPL typically qualify for subsidized healthcare. This is calculated by dividing the household income by the FPL for the specific family size, and then multiplying by 100 to get the percentage. For example, a three-person household with an income of $35,000 would be at 141% FPL [(35,000/24,860) x 100].
If you are struggling to afford health insurance, it is recommended to explore alternative options like Medicaid or subsidized plans through your state's health insurance marketplace. These programs can provide vital financial assistance and ensure access to essential healthcare services.
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Employer-provided insurance
In the United States, a majority of working-age adults obtain health insurance through their employer. However, not all workers are offered employer-sponsored coverage, and even when it is offered, some may not be able to afford their share of the premiums.
If you are offered employer-provided insurance but find it unaffordable, you may be able to apply for a subsidy to help you buy your own insurance. This will depend on whether your employer's insurance is considered affordable and provides minimum value (i.e., is comprehensive). If it is not considered affordable, you may be eligible for a government subsidy, but this will also depend on your household income.
To qualify for a subsidy, the cost of the second-lowest-cost Silver plan in the Marketplace must be more than a certain percentage of your household income. For 2025, a job-based health plan is considered "affordable" if your share of the monthly premium in the lowest-cost plan offered by the employer is less than 9.02% of your household income. If your employer's plan meets this standard and is considered "affordable," you will not qualify for a premium tax credit if you buy a Marketplace insurance plan instead.
If you are already enrolled in Medicaid and are offered private insurance through your employer, you may be able to keep your Medicaid coverage. However, there is no easy answer to this question, as it depends on various factors. For example, if you keep your Medicaid coverage and decline your employer's insurance, you may miss the open enrollment period with your employer. In that case, you may still be able to get health insurance, but you may not qualify for any tax credits based on your income. Additionally, Medicaid eligibility varies across states and is generally limited in states that have not expanded Medicaid. As of December 2024, 41 states, including Washington, D.C., had adopted the ACA Medicaid expansion.
If you are unable to keep your Medicaid coverage and cannot afford your employer's insurance, there are other options to consider. You can apply for a Marketplace plan, such as HealthCare.gov, which offers low-cost, quality health coverage. You can also look into resources to help you pay for your employer-provided plan, such as premium tax credits and cost-sharing subsidies. To determine eligibility for these programs, the government will consider your household income, the average cost of health coverage in your area, and your income in relation to the federal poverty line (FPL).
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Medicaid expansion
The Affordable Care Act (ACA) has expanded Medicaid coverage to nearly all adults with incomes up to 138% of the Federal Poverty Level ($21,597 for an individual in 2025). This has provided states with an enhanced federal matching rate (FMAP) for their expansion populations. As of early 2025, Medicaid has been expanded in 40 states and the District of Columbia.
However, as of June 2024, there were still ten states that had not expanded Medicaid, leaving a coverage gap for nearly 1.5 million people. In these states, adults with incomes below 100% of the federal poverty level who don't qualify for Medicaid based on disability, age, or other factors, fall into a gap. Their incomes are too high to qualify for Medicaid, but too low to qualify for savings on a Marketplace insurance plan.
If you can't afford insurance, you have the option of going without, but this is not recommended. Uninsured people are less likely to access care and more likely to delay or forgo it because of the costs. They often face unaffordable medical bills when they do seek care, which can quickly translate into medical debt.
If you can't afford health insurance and don't qualify for Medicaid, there are still some options. You can apply for a Marketplace plan, and you may be eligible for a tax credit or a cost-sharing subsidy to help lower your monthly insurance payment and out-of-pocket expenses. You can also look into getting care at a nearby community health center, which provides services on a sliding scale based on your income.
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Marketplace subsidies
If you are struggling to afford health insurance, there are resources available to help you pay for your plan. Firstly, you should check if you qualify for Medicaid or CHIP based on your income. If you do not qualify for Medicaid, you may be eligible for Marketplace subsidies. The Affordable Care Act (ACA) provides sliding-scale subsidies that lower premiums and insurers offer plans with reduced out-of-pocket (OOP) costs for eligible individuals.
There are two types of financial assistance available to Marketplace enrollees: premium tax credits and cost-sharing subsidies. Premium tax credits are the first type of financial assistance, which reduces enrollees' monthly payments for insurance coverage. The credit can be sent directly to your health plan each month, or you can claim it on your federal tax return. The amount of your tax credit is based on the price of the benchmark silver plan in your area, but you can use it to purchase any Marketplace plan.
The second type of financial assistance is the cost-sharing subsidy, which reduces enrollees' deductibles and other out-of-pocket costs when they go to the doctor or have a hospital stay. These subsidies are only available to people who are eligible for a premium tax credit and make between 100% and 250% of the poverty level. If you qualify for a cost-sharing subsidy, you will need to sign up for a silver plan.
To receive a premium tax credit, you must meet certain criteria. Firstly, you must have a household income at least equal to the Federal Poverty Level (FPL). Secondly, you must not have access to an affordable employer plan. Thirdly, you must not be eligible for coverage through Medicare, Medicaid, or CHIP. Finally, you must have U.S. citizenship or proof of legal residency. To determine if you are eligible for a tax credit, the government will consider the size of your household, your overall income, and the average cost of health coverage in your area.
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Tax credits
If you are struggling to afford health insurance and don't qualify for Medicaid, there are resources available to help you pay for your plan. Premium tax credits can help eligible individuals and families afford health insurance purchased through the Health Insurance Marketplace. The Health Insurance Marketplace is available at HealthCare.gov, for most states, while some states have their own marketplaces.
To qualify for a premium tax credit, the government will look at the size of your household, your overall income, and the average cost of health coverage in your area. If your income is between 100% and 400% of the Federal Poverty Line (FPL), you will qualify for premium tax credits that lower your monthly premium for a Marketplace health insurance plan. If your income is above 400% FPL, you may still qualify for premium tax credits. The premium tax credit can be sent directly to your health plan each month, or you can claim it on your federal tax return.
If you benefit from advance payments of the premium tax credit, you must report life changes to the Marketplace as they happen, as changes to your household, income, or family size may affect the amount of your premium tax credit. For example, if you use more advance payments of the tax credit than you qualify for, you must repay the difference when you file your federal income tax return. If you use less premium tax credit than you qualify for, you will receive the difference as a refundable credit when you file your taxes.
In addition to premium tax credits, you may also qualify for a cost-sharing subsidy to help offset out-of-pocket health care expenses like deductibles, coinsurance, and copays. For example, if your health plan has a $50 copay for an office visit, your cost-sharing subsidy might decrease that copay to $30.
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Frequently asked questions
If you can't afford health insurance, you can apply for a government subsidy to help cover the cost. You can also look into Medicaid, which provides free or low-cost health coverage to low-income individuals, or CHIP, which offers low-cost health coverage to children.
To qualify for a subsidy, your income must be between 100% and 400% of the federal poverty line (FPL). The government will also consider your household size and the average cost of health coverage in your area.
There are two main types of subsidies: premium tax credits and cost-sharing subsidies. Premium tax credits help cover your monthly premium, while cost-sharing subsidies reduce out-of-pocket expenses like deductibles and copays.
You may be able to keep your Medicaid coverage and decline the private insurance offered by your employer if the cost is too high. However, you should check with your state's administrative agency to understand the specific rules for Medicaid eligibility and keeping Medicaid while eligible for other coverage.
