Health Insurance for Individuals Who Don’t Qualify for Medicaid

There is a serious gap in our nation’s health insurance safety net; millions of people with low income cannot afford an Affordable Care Act (ACA) health insurance plan and don’t qualify for Medicaid.

If you are one of these people, you may already know that this is a tough position. You are caught in the middle. You do not qualify for ACA exchange tax credits and you do not qualify for Medicaid. Although it may not make sense, those in this coverage gap must either remain uninsured or pay full price with no subsidy if they go to the ACA exchange.

The good news is that there are answers and solutions for you outside of ACA. In this post, we’ll explain who qualifies for Medicaid, why so many people need to seek other coverage, and the types of coverage that are available.

Short-term medical insurance is a solution that many people are using to fill this gap. They may use it for a few months or for an extended period of time. It allows them to take comfort while getting more economical health insurance coverage for themselves and their families.

Temporary health insurance for individuals who don’t qualify for Medicaid but can’t afford ACA plans (also known as Obamacare) is also a good solution because most of these insurance plans allow you to use any medical providers rather than being limited to those in a specific network. Some networks can offer fewer choices of doctors and hospitals.

Pivot Health: Short-Term Health Insurance to Fill the Gap

Pivot Health’s short-term health insurance offers choices that fill this gap for low-income individuals and families.

• These plans can offer lower deductibles than some ACA healthcare marketplace plans.
• Most allow you to use any doctor or hospital without having to be sure they are in a specific network for coverage.
• Some of the plan choices include physician copays and additional coverage options for prescription drugs.

In addition, with a Pivot Health short-term health insurance policy, you also receive a number of other non-insurance benefits that can save you money:

• Free telehealth doctor consultations by phone or video
• 15%-30% off eye exams, contacts and eyeglasses
• Up to 70% savings on prescription drugs nationwide at over 66,000 pharmacies

Medicaid Rules & The ACA

Medicaid is a joint program of the federal government and state governments. It is designed to provide health coverage to Americans with low income. The rules and eligibility for Medicaid vary by state, so be sure to check with your state’s Medicaid program if you think you may qualify. The program may also have a name other than “Medicaid” in your state.

The Affordable Care Act (ACA), passed in 2010, included an opportunity for states to expand Medicaid to cover more people. States that agreed to expand their Medicaid programs were allowed to extend eligibility to adults with income that is at or below 133% of the Federal Poverty Level.

(A note about the 133% figure: According to HealthCare.gov, “Because of the way this is calculated, it turns out to be 138% of the federal poverty level. A few states use a different income limit.” That is why you may see the figure as 133% in some publications and 138% in other publications.)

The Federal Poverty Level income numbers for 2024 are shown below. (Note: The poverty guideline income figures are higher for Alaska and Hawaii.)

• $15,060 for individuals
• $20,440 for a family of 2
• $25,820 for a family of 3
• $31,200 for a family of 4
• $36,580 for a family of 5
• $41,960 for a family of 6
• $47,340 for a family of 7
• $52,720 for a family of 8
• $5,380 per person additional for a family of 9+

States that Did Not Expand Medicaid

Not all states agreed to the Medicaid expansion that was allowed through the ACA. Although the authors of the ACA expected the expansion to be national, a June 2012 ruling by the U.S. Supreme Court made the Medicaid expansion optional, at the choice of the states. Some states proceeded with expansion and some did not base on many different factors.

Currently, 10 states have not expanded Medicaid, according to a map on the Kaiser Family Foundation website.

In states that did not expand Medicaid, the income eligibility is generally a lower percentage of the Federal Poverty Level.

To find out if your state expanded Medicaid and to see if you qualify for Medicaid in your state, the Department of Health and Human Services has a link on its HealthCare.gov page where you can find out.

Caught in the Middle: 1.9 Million Americans

The ACA provides tax credits (also called subsidies) for low-income people who purchase coverage on the exchanges. However, these tax credits only apply to those who have a health insurance premium that is above 8.5% of their total household income (the current rule until 2025).

As written, the ACA expected those below 100 percent of the Federal Poverty Level to be eligible for Medicaid.

In states that did not expand Medicaid, uninsured individuals with incomes above the state Medicaid eligibility threshold yet below 100 percent of the Federal Poverty Level have hardly any options besides paying full price for an unsubsidized exchange plan or purchasing a short-term medical insurance plan or other private insurance coverage not available on the exchange.

There are roughly 1.9 million Americans who fall into this coverage gap according to the Kaiser Family Foundation.

Low Income Health Insurance Needs

For Americans with low income, health insurance is not often at the top of the list of expenses with which they are concerned. Food, housing, utilities, clothing, and the immediate needs of their children come first. There is not usually a lot left over for insurance premiums and out-of-pocket medical costs.

That is why the ACA marketplace—if you don’t qualify for tax credits—is usually an unaffordable option for low-income individuals and families. Even if a plan is available on the exchange for which you can afford the premiums (without a subsidy), you likely cannot afford the high deductible that you would have to pay out of your own pocket before the insurance would pay benefits. This amount is typically many thousands of dollars a year, in addition to your premium payments.

And even if you do qualify for ACA tax credits, the health insurance plans on the exchanges may still not be affordable for you because of the high deductibles and other high out-of-pocket expenses.

Don’t Be Caught in the Middle–Insurance Solutions that Meet Your Needs

While low-income individuals and families may not be able to afford unsubsidized Obamacare, that doesn’t mean they have to go without health insurance.

If you qualify, short-term medical insurance can provide the coverage you need with economical premiums. Your deductible and maximum for out-of-pocket expenses could also be lower, meaning you will pay less when you need medical care. It’s one of many reasons to buy short-term health insurance.

Other supplemental health insurance or fixed benefit medical plans also are options for low-income individuals and families. You can find more about these at Pivot Health’s website.

P.S.: What If The ACA Is Repealed?

If there were a full repeal of the ACA, the Medicaid expansion in the states that adopted this measure could be rolled back. That would mean fewer people would be eligible for Medicaid in those states.

However, it is likely that a repeal of the ACA would be accompanied by or followed closely by replacement provisions that would deal with those currently enrolled in Medicaid through the ACA expansion. The rules and eligibility may be different than they are today, but it is likely that there would be some program to assist those currently covered.

Those individuals and families that fall into the low-income coverage gap need to make choices that fit their needs and their budgets. Short-term medical insurance and other choices outside the ACA marketplace can fit those needs.

Call or message us today to learn more about your health coverage options.