Haris Ashley
If you are unemployed or have low wages, you may be eligible for free or low-cost health insurance. In the US, the best options for free or low-cost health insurance are Medicaid and the Affordable Care Act (ACA) health insurance marketplace. The cheapest option is often to buy discounted insurance through HealthCare.gov or your state's health insurance marketplace. The lower your income, the more you'll save on health insurance.
| Characteristics | Values |
|---|---|
| Insurance type | Medicaid, CHIP, COBRA, Affordable Care Act (ACA) health insurance marketplace, or a private insurance plan |
| Cost | Free or low-cost |
| Eligibility | Based on income, family size, and state of residence |
| Application | Apply through HealthCare.gov or your state's health insurance marketplace |
| Coverage | Medical care, checkups, hospital care, prescription drugs, and dental coverage |
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What You'll Learn
Medicaid and CHIP
Medicaid and the Children's Health Insurance Program (CHIP) are public health insurance options that provide free or low-cost health coverage to eligible individuals. These programs are particularly aimed at low-income people, families, children, pregnant women, the elderly, and people with disabilities.
Medicaid is a type of free or low-cost government insurance. Eligibility for Medicaid is usually based on monthly income, and unemployment income is considered when determining eligibility. For instance, in many states, individuals are eligible if their monthly income, including unemployment payments, is less than $1,732, or $3,588 for a family of four. In addition to income, other factors such as household size, family status, disability, age, and other factors may be considered. The cost and coverage of Medicaid may vary from state to state, and some states have expanded their programs to cover all people below certain income levels. Some states also provide continued coverage for former foster children who have aged out of the system.
CHIP provides health coverage to eligible children through both Medicaid and separate CHIP programs. Children eligible for CHIP are typically from families with incomes too high to qualify for Medicaid but too low to afford private coverage. CHIP is funded by both state and federal governments and is managed by states according to federal requirements. Similar to Medicaid, CHIP coverage and costs may differ across states.
To determine eligibility for Medicaid or CHIP, individuals can enter their household size and state into the HealthCare.gov website. If it appears that anyone in the household qualifies, the relevant state agency will be notified, and they will contact the individual about enrollment.
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Affordable Care Act (ACA)
The Affordable Care Act (ACA) was enacted on March 23, 2010, and consists of two parts: the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act. The ACA contains comprehensive health insurance reforms and includes tax provisions that affect individuals, families, businesses, insurers, tax-exempt organizations, and government entities.
The ACA requires individuals and their dependents to have healthcare coverage. If you are unemployed, you can purchase discounted insurance through HealthCare.gov or your state's health insurance marketplace. The lower your income, the more you will save on health insurance.
The ACA marketplace offers a variety of coverage options and discounted rates based on income. You can check if you qualify for savings on a Marketplace plan by filling out an application. Savings are based on your household size and your estimated income for the year you need coverage.
If you don't qualify for savings on a Marketplace plan, you can find low-cost health care at a nearby community health center. You may also be eligible for COBRA continuation coverage if you lost your job and your former employer offers it. COBRA is a federal law that allows you to maintain health coverage temporarily after your employment ends.
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Job-based health plans
If you are employed and have low wages, you may be eligible for a job-based health plan. In 2025, a job-based health plan is considered "affordable" if your share of the monthly premium in the lowest-cost plan offered by your employer is less than 9.02% of your household income. This is a federal standard that applies to job-based health plans. If your employer's plan meets this standard and is considered "affordable", you won't qualify for a premium tax credit if you buy a Marketplace insurance plan instead.
Most job-based plans meet these standards. If your job doesn't offer health insurance, you can keep your Marketplace plan and continue to get any savings you qualify for based on your household income. You can also apply for Medicaid, which is free or low-cost government insurance for people with low incomes. Many states have expanded their Medicaid programs to cover all people below certain income levels.
If you are unemployed, you could qualify for free health insurance through Medicaid. Eligibility is based on monthly income, so a sharp drop in earnings after losing your job could make you more likely to qualify. However, unemployment income is considered when determining eligibility. In many states, you are only eligible if your monthly income, including unemployment payments, is less than $1,732 for an individual or $3,588 for a family of four.
If you are unemployed, you can also consider a plan through the Affordable Care Act (ACA) health insurance marketplace. You may be eligible for government subsidies that can significantly lower your monthly rate. You can also find low-cost health care at a nearby community health center.
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COBRA continuation coverage
If you are unemployed, on low wages, or have recently experienced a change in eligibility, you may be eligible for COBRA continuation coverage. This is a federal law that allows you to maintain health coverage temporarily after your employment ends, you lose coverage as a dependent, or due to another qualifying event. COBRA, or the Consolidated Omnibus Budget Reconciliation Act, gives workers and their families who lose their health benefits the option to continue group health benefits provided by their group health plan for limited periods.
COBRA coverage is helpful if you want to continue seeing the same doctors and receiving the same health plan benefits. Your dependents (i.e. spouse, former spouse, or children) are also eligible for COBRA coverage, even if you, the former employee, do not sign up. You have 60 days to enroll in COBRA once your employer-sponsored benefits end, and coverage can last for 18 to 36 months. It is important to note that your health insurance costs will increase significantly, as you will be required to pay the entire group rate premium out of pocket, plus an administrative fee of up to 2%.
COBRA is a good option if you need temporary health coverage while transitioning between jobs or insurance plans. It provides flexibility to find other health insurance options without losing coverage. However, due to the potentially high costs, it may be worth considering other low-cost health insurance options if you are unemployed or on low wages. These include Medicaid, a free or low-cost government insurance program, or a plan through the Affordable Care Act (ACA) health insurance marketplace, which offers discounted rates based on income.
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Private insurance plans
When choosing a private insurance plan, it is important to consider the network of medical providers included in the plan. Selecting a plan that includes your preferred medical providers can help you save money, as out-of-network doctors may not accept your insurance and you may be charged the full cost of a visit.
Additionally, it is worth noting that the affordability of private insurance plans is relative to your income. In 2025, a job-based health plan is considered "affordable" if your share of the monthly premium in the lowest-cost plan offered by your employer is less than 9.02% of your household income.
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Frequently asked questions
The cheapest health insurance plan for low-wage earners is Medicaid, which is free to low-cost.
Medicaid provides coverage for low-income people, families, children, pregnant people, the elderly, and people with disabilities.
Eligibility for Medicaid is based on monthly income. You can check your eligibility by filling out a Marketplace application.
Some alternatives to Medicaid include the Affordable Care Act (ACA) health insurance marketplace, COBRA continuation coverage, and CHIP.
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