What is the income limit for marketplace insurance? There actually isn’t one, but you may qualify for additional savings if you meet certain requirements.
For many Americans, their employer does not offer health insurance at all or they do not offer benefits for part-time and seasonal employees. Without health insurance, you could be saddled with extensive medical debt or be unable to afford necessary medications and checkups. If you are unable to get health insurance through work or through your spouse or parent, then you probably qualify for marketplace insurance.
Unlike Medicaid, marketplace insurance does not have an income limit. If your household income meets certain thresholds, you can qualify for special discounts on your insurance, such as a premium tax credit, cost sharing, or catastrophic coverage.
Marketplace insurance is managed both on the state level and at the federal level. Whether or not you qualify for discounts will depend on where you live, your income, and how many people are in your household. Your discounts may also change with your situation if your income is reduced, you gain a household member, or you get a raise at work.
Sources include the Internal Revenue Service, HealthCare.gov, Investopedia, HealthInsurance.org, Medicaid.gov, and GoodRx.
What is Marketplace Insurance?
Marketplace insurance is not actually a type of insurance. The term “marketplace insurance” is used to describe an insurance shopping service that allows people to get affordable coverage. The marketplace insurance exchange was created by the Affordable Care Act, which is also called “Obamacare.” Some states run their own marketplace exchanges, and others go through the federal exchange.
When you shop for marketplace insurance, you will be able to access plans provided by well-established insurance providers. Unlike other types of insurance, there are additional rules about coverage for marketplace insurers. For example, marketplace insurance is legally required to cover preventive care.
The following services are covered as preventive care:
- Diet and mental health screening
- Cholesterol and blood pressure
- Immunizations and vaccines
- STD screening and counseling
- Alcoholism and tobacco addiction screening
- Lung cancer and colorectal cancer screening
- Diabetes screening
- Hepatitis B and C screening
- HIV screening and PrEP
- Fall prevention intervention through physical therapy or vitamin use
- Aspirin and statin preventive medication
- Abdominal aortic aneurysm one-time screening for those at risk
Marketplace insurance is also required to accept new enrollees who have pre-existing conditions without increasing their premiums or adding additional fees.
Is There an Income Limit to Get Marketplace Insurance?
There is no income limit to qualify for marketplace insurance. Whether you make $36,000 a year or $136,000, you will not be ineligible for marketplace insurance on the basis of income.
Marketplace insurance eligibility is not determined by income. Instead, there are 4 boxes that you must check before you can enroll in marketplace insurance:
- You need to be a U.S. citizen, U.S. resident, an asylum seeker, a green card holder, or have either a work visa or a student visa.
- You must not be incarcerated. Parolees are eligible to get marketplace insurance after they are released. If you are convicted and sentenced to prison, you must terminate your insurance coverage.
- You must be unable to get health insurance coverage through employment or through a family member such as a spouse or a parent.
- You must not qualify for Medicare or Medicaid. If you turn 65 after the Medicare enrollment period is over, you are able to get marketplace coverage until the next Medicare enrollment period. Once you are on Medicare, you must terminate your marketplace coverage.
What is the Income Limit For Subsidized Coverage on Marketplace Insurance?
If you have a household income below a certain threshold, you can qualify for subsidized health insurance and other discounts. The threshold to qualify will depend on your location, your income, and the size of your household. To learn what discounts and subsidies you qualify for, simply fill out the marketplace application screener. If your state has its own marketplace exchange, you will be directed to your state’s comparison website.
Before you enroll in marketplace insurance, you should check to see if you qualify for coverage under Medicaid expansion. Currently, 38 states have expanded Medicaid under the Affordable Care Act; only 12 states have refused to expand coverage.
Medicaid expansion is a provision to raise the income limit that would qualify someone for coverage. This allows more low-income Americans to access affordable health insurance. Under Medicaid expansion, adults up to 64 years old can qualify, as can anyone with a household income of up to 138% of the federal poverty level. This has allowed an additional 10 to 15 million Americans to qualify for Medicaid.
To see if you now qualify for Medicaid under the ACA expansion, simply select your state and visit your state’s Medicaid website. If you qualify for Medicaid under the Medicaid expansion, you will no longer be eligible for marketplace insurance.
Premium Tax Credit
Marketplace insurance enrollees can qualify for a premium tax credit that will lower the monthly cost of their insurance plan. The American Rescue Plan temporarily expanded access to the premium tax credit, so a household that makes between 100% and 400% of the federal poverty level income will be eligible.
The premium tax credit can be used in 2 different ways.
The first way is to receive your credit in full when you file your taxes. This means that you will receive the amount of the credit as a refund. Once you have the extra funds, you can use it to pay your monthly health insurance premiums. This will lower the overall out-of-pocket cost for your insurance.
The second way is to choose advance payment for the tax credit. When you choose this option, the government will make payments to your marketplace insurer on your behalf, which will lower your out-of-pocket costs. When you choose advance payment, you will not receive a cash refund from your tax credit during tax season.
Comparing Plans to Save
Another way to save money on marketplace insurance is to choose a plan with a lower monthly premium. Like other insurers, marketplace insurance offers 4 tiers of coverage.
The bronze tier has the lowest monthly premiums but also the least amount of coverage. On the bronze tier, the plan will pay for 60% of health costs and you have to pay the other 40%.
The silver tier has a slightly higher monthly cost and a little more coverage than the bronze tier. When you receive healthcare, the silver tier plan pays for 70% of the expenses and you have to pay for the other 30%.
The gold tier is the second best option in terms of coverage. This plan will cover 80% of health costs and you will only have to pay for 20%. However, the trade off is that the gold tier has the second highest monthly premium.
The platinum tier has the best coverage and the highest monthly premium. This plan will pay for 90% of healthcare costs.
Even if you don’t qualify for certain credits and discounts on your marketplace insurance, you can still save on your monthly payment by choosing a less expensive plan. This price shopping method is ideal in the short term for saving money, but it can be more expensive in the long run if you have to pay for a higher percentage of the medical costs yourself.
Cost sharing is only available on silver tier plans. If you qualify for this discount, it will reduce the amount that you have to pay for out-of-pocket minimums and copays. It will also lower your deductible.
For qualifying enrollees, cost sharing can take a $25 copay down to a $5 copay. It can also lower your deductible from $2,500 to $500 of out-of-pocket spending before your insurance kicks in.
Cost sharing is not automatically applied to enrollees who qualify. To get this benefit, you will need to apply for it through your local marketplace insurance exchange or through the federal insurance marketplace.
Catastrophic Insurance Coverage
Catastrophic coverage is a type of insurance that is available to anyone under the age of 30 who qualifies for a hardship exemption. It is not the same as marketplace insurance, but is low-cost and may be an option if you are unable to afford marketplace insurance.
The hardship exemption is defined as any medical or financial event that makes it difficult for you to get normal health insurance. Qualifying hardships include:
- Becoming homeless, being evicted, facing foreclosure, or filing for bankruptcy
- Death of a close family member
- Being the victim of domestic abuse
- Acquiring substantial medical debt that you cannot pay off
- You lost your home in a fire, flood, or other natural disaster
- You gained an unexpected financial strain by having to care for an ill or dying family member.
Catastrophic coverage for hardships will cover the month before and after the period of hardship and then the period of hardship itself. In the case of experiencing homelessness, catastrophic coverage will extend from the month before you lost housing until a month after you regain consistent housing.
Compared to marketplace and traditional insurance, catastrophic coverage has the lowest monthly premiums but the highest deductible and out-of-pocket maximum. This type of health insurance is best for young people with few health risks. It is also intended to be temporary until you can get on a more suitable insurance plan.