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Why Don’t I Qualify for the Affordable Care Act?

The Patient Protection and Affordable Care Act is the health-reform law that was passed in 2010. It’s also known by its shorter acronym (ACA) and Obamacare. 
The goal of the ACA was to make health insurance more affordable and available to all U.S. citizens. Health insurance under the ACA offered coverage for pre-existing conditions and preventive care services at no cost to the insured. It also increased the age to which children could remain on their parent’s plan.
So, why don’t you qualify for Obamacare? Let’s find out.

Who Qualifies for Obamacare?

Obamacare is available to almost any U.S. citizen who needs health insurance. As long as you meet the basic eligibility requirements below, you can enroll in an Obamacare insurance plan.
To be eligible for Obamacare, you must

  • Live in the United States
  • Be a U.S. citizen, national, or be lawfully present in the states
  • Not be incarcerated
  • Not be eligible for Medicare
    So why do some people say they don’t qualify for Obamacare? They probably mean that they don’t qualify for Obamacare subsidies. A premium tax credit is available for individuals who meet certain income requirements. To qualify, your household income must be between 100% and 400% of the Federal Poverty Level (FPL). However, in 2021 and 2022, the threshold was increased to 500% of the FPL.
    What is the federal poverty level? The FPL is calculated each year by the Department of Health and Human Services (HHS) to determine eligibility for financial assistance programs, like Obamacare, Medicaid, and the Children’s Health Insurance Program (CHIP).

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Who Qualifies for ACA Tax Credit Subsidies?

As we mentioned, anyone whose household income falls between 100% to 400% qualifies for a premium tax credit. This subsidy will reduce the amount you must pay for your Obamacare health insurance plan.
The American Resue Plan Act (ARPA) that was signed in March of 2021 extended subsidies to Americans who struggle to afford health insurance due to the economic impact of COVID-19. The ARPA made health insurance even more affordable than it is under the original Obamacare.
Under the ARPA, no individual who is not covered under an employer plan, Medicare, or Medicaid, will pay more than 8.5% of their total income for a Silver plan. People who received a minimum of one week of unemployment in 2021 are also able to get a Silver plan with $0 monthly premiums and cost-sharing reduction. Lastly, households who earned 500% of the FPL are eligible for some cost-sharing reductions that had been limited to lower-income families.
Your household income is determined by your modified adjusted gross income or MAGI. This number closely resembles your adjusted gross income (AGI) that is reflected on your tax return.

How Do Obamacare Subsidies Work?

There are actually two types of Affordable Care Act subsidies: Advanced Premium Credits and Cost-Sharing Reductions. Let’s look at premium tax credits first, as they are the most common.
Premium tax credit subsidies are what can help pay your Marketplace premiums. You’ll need to calculate your projected income for the current year to know if you qualify. If you do, you can do one of two things.
The first option is the take the credit throughout the entire year. It will be paid directly to your health insurance company, thereby reducing your portion of the premium.
The second option allows you to pay your premium in full every month and then receive your subsidy when you file your tax return for the year.
There is no right or wrong choice; you should do whichever option works best for you. However, you’ll need to keep a couple of things in mind. If you choose the first option and end up underestimating your income, you will be required to pay part of the subsidy back at the end of the year. If you choose the second option and end up overestimating your income, you’ll receive an adjusted subsidy refund when you file your income taxes.
To avoid either issue, you should report all income changes by updating your Obamacare application online or contacting the Marketplace call center.
The second type of ACA subsidy is the Cost-Sharing Reduction (CSR) subsidy. These are offered if you enroll in a Silver-tiered Obamacare plan. CSRs will reduce your out-of-pocket expenses for covered services. They’ll help pay your deductible, copays, and coinsurance costs.
Need help figuring out if you qualify for Obamacare subsidies? Our experts can help! We can help you determine your Obamacare eligibility and choose a plan that fits your needs. CoverMile offer many health insurance plans in Texas, and our services come at no additional cost to you. Give us a call today!