What to Know About Low Income Health Insurance
What to Know About Low Income Health Insurance
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If you have a low income, Medicaid and the Children's Health Insurance Program (CHIP) are good options for health insurance.
Health insurance pays for part of your medical care, but not everyone can afford a policy. That's why health insurance programs for low income individuals and families are important. Federal programs like Medicaid and CHIP, state programs, and savings opportunities can help you get a health insurance plan.
What is low income health insurance?
Low income health insurance programs offer free or low-cost plans to individuals or families who meet the income requirements.
Low income policies typically offer cheap health insurance, but not everyone qualifies. You usually have to meet income requirements, but sometimes coverage is available for other groups, like children or pregnant women.
Which health insurance is provided for low income Americans?
Medicaid and the Children's Health Insurance Program (CHIP) are the two most common types of low income health insurance.
A few states also offer a Basic Health Program, which is designed for those who don't qualify for other low income programs. You could also save on health insurance that you buy from a marketplace site if you qualify for discounts called subsidies.
Medicaid
Medicaid is the best option for low income health insurance that offers good coverage.
States have some freedom to set their own Medicaid eligibility requirements, but eligibility is generally based on income. In some states, you have to meet both an income threshold and other requirements to qualify.
In the states that have expanded Medicaid, low income households can qualify based entirely on how much pretax money they made in the last year. For example, the federal poverty level (FPL) for a single person in 2023 is $14,580. The threshold to qualify for Medicaid is 138% of the federal poverty level. This means that to enroll in Medicaid in most states, an individual can make no more than $20,120 per year.
The federal poverty level is different based on the number of people in your household, which means the maximum amount you can make and qualify for Medicaid varies. Alaska and Hawaii have higher poverty level limits, so you'll qualify even with a higher income.
People in family or household | Maximum income limit* |
|---|---|
| 1 | $20,120 |
| 2 | $27,214 |
| 3 | $34,307 |
| 4 | $41,400 |
| 5 | $48,493 |
*For 2023, in states with expanded Medicaid
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While the federal government mandates some of Medicaid's eligibility requirements, each state has the ability to offer coverage to other groups. For example, all states and Washington, D.C. extend Medicaid coverage if you have cervical or breast cancer and make up to 250% of the federal poverty level.
In the 10 states that have not expanded Medicaid, you can't qualify using your income alone. You must be eligible based on income along with other factors like age, disability or medical condition.
- Alabama
- Florida
- Georgia
- Kansas
- Mississippi
- South Carolina
- Tennessee
- Texas
- Wisconsin
- Wyoming
Additional, North Carolina has approved Medicaid expansion approved, but the program is not yet active.
If you apply for Medicaid through your state, you’ll also find out if your children qualify for the Children's Health Insurance Program . If they qualify, you won't have to buy an insurance plan to cover them.
Each state can set limits on expenses for appointments and treatment, such as rates, deductibles, copayments and coinsurance, although federal law limits how high these amounts can be. And if you qualify for Medicaid, you'll have coverage for at least 15 basic benefits, and states can add more.
- Doctor appointments
- Laboratory and X-ray tests
- Inpatient hospital services
- Outpatient hospital services
- Family planning services
- Nurse midwife services
- Some screening, diagnostic and treatment services
- Certain freestanding birth center services
- Nursing facility services
- Home health services
- Rural health clinic services
- Federally qualified health center services
- Transportation to medical appointments
- Smoking counseling for pregnant women
- Certified pediatric and family nurse practitioner services
You can apply for Medicaid with your state, but the best option is usually applying through the marketplace. This way, you’ll also learn if you qualify for an individual marketplace plan based on your income.
Medicaid vs. CHIP
The main difference between Medicaid and CHIP is that Medicaid can also provide health insurance for adults who struggle to afford insurance. CHIP only covers children, although pregnant women qualify in some states.
Children’s Health Insurance Program (CHIP)
The Children's Health Insurance Program, also called CHIP, offers low-cost health insurance for children (and pregnant women in some states) if their families don't qualify for Medicaid. Household income limits for CHIP vary by state.
CHIP offers coverage for many of the same services as Medicaid, which often include:
- Routine checkups
- Doctor visits
- Immunizations
- Laboratory and X-ray services
- Prescriptions
- Emergency services
- Inpatient and outpatient hospital care
- Dental and vision care
You can apply for CHIP through the health insurance marketplace or through your local Medicaid office. The marketplace will also determine if you qualify for an individual Affordable Care Act (ACA) insurance plan based on your income, so you won't need to apply separately.
Medicaid and CHIP document requirements
When you apply for Medicaid or CHIP, you'll need to provide information on your income and citizenship status. Usually, your Medicaid office can confirm your data electronically. If the information isn't available, you may be asked to provide paperwork. For example, to verify that you've lost other insurance, you may need to show a notice of termination received from your employer. Documentation needs can vary by state.
- Proof of income
- Proof of citizenship/immigration status
- Identification (such as Social Security number)
- Medicare enrollment information (if you dual-qualify for Medicare and Medicaid)
- Termination of other insurance (if you've recently lost coverage)
Basic Health Program (BHP)
A Basic Health Program (BHP) is a type of program that provides low income health insurance for people who do not qualify for other options. Only two states currently offer a BHP: Minnesota (MinnesotaCare) and New York (The Essential Plan).
You may be eligible for a Basic Health Program if you are a citizen or lawfully present noncitizen and do not qualify for Medicaid, CHIP or other programs. Your income must be between 133% and 200% of the federal poverty level.
A Basic Health Program plan is required by law to cover at least the 10 essential health benefits provided by the ACA.
- Outpatient care, like doctor visits
- Hospitalization
- Emergency services
- Pregnancy, maternity and newborn care
- Mental health and substance abuse services
- Prescription drugs
- Services and devices for rehabilitation
- Laboratory services
- Pediatric services
- Preventive and wellness services and chronic disease management
If you enroll in a Basic Health Program plan, your monthly health insurance premium as well as your deductibles, copays and coinsurance levels will be the same or lower than with a plan you would buy on the marketplace.
What are other low income health insurance options?
If you can't afford health insurance but don't qualify for programs like Medicaid or CHIP, there are other options for coverage. Those include the Vaccines for Children (VFC) program and community health centers.
The Vaccines for Children (VFC) program
The VFC program is available in all states. It helps provide vaccines for children who are under age 19 and are one of the following:
- Medicaid-eligible
- Uninsured or underinsured
- American Indian or Alaska Native
Community health centers
Community health centers don't sell health insurance for low income families and individuals, but they do offer health care. They also usually accept low income health insurance like Medicaid and CHIP.
The Affordable Care Act expanded funding to community health centers, which provide low-cost health care services to communities that may otherwise not have access to medical care. In addition to low income households, health centers often serve agricultural workers, people without housing or veterans. Health centers can be a good place to get basic health care.
- General primary care
- Referrals to specialized care
- Prenatal care
- Baby shots
How can I lower my health insurance?
You can lower the cost of your health insurance even if you don't qualify for low income programs.
If you don't qualify for Medicaid or CHIP, you can still get low-cost health coverage. You may pay more for coverage than if you were able to enroll in a government-funded program, but there are ways to help your monthly rate fit into your budget.
Premium tax credits
A premium tax credit, also known as a premium subsidy, is a good way to get cheaper health insurance.
When you purchase a Bronze, Silver, Gold or Platinum plan through the federal or a state marketplace, you might qualify for a premium tax credit based on your income and household size. You can use the tax credit to lower the cost of any metal-tier plan, and it may even cover your entire monthly premium. Subsidies aren't available on Catastrophic plans.
To qualify for the subsidy, your household must be at or above the federal poverty level. Premium subsidies are not available for Medicaid or CHIP.
As a result of two wide-reaching federal laws — the American Rescue Plan and the Inflation Reduction Act — the amount you pay for health insurance is reduced through the end of 2025. Because of the increased subsidies, many people will spend less than $30 per month on health insurance.
With a premium subsidy, your expected monthly cost is determined by how close your income is to the federal poverty level. Using a subsidy calculator can help you determine how much you could save on your health insurance rate.
Cost-sharing reductions
Rather than lowering your monthly rate, cost-sharing reductions cut the price of your medical care. With a cost-sharing reduction, your copayments, coinsurance, deductible and out-of-pocket maximum amounts can be lower, which means you pay less for your medical care and your health insurance pays more.
To qualify for cost-sharing reductions, you must apply through the marketplace and you have to buy a Silver plan.
You may be eligible for a cost-sharing reduction if your income is between 100% and 250% of the federal poverty level. If you qualify for Medicaid, you cannot receive cost-sharing reductions.
Frequently asked questions
What is considered low income for health insurance?
For states with expanded Medicaid, you can earn no more than 138% of the federal poverty level to qualify. For a single individual, that's about $20,120 in pretax income. The income limit for a family of four is $41,400. Other types of low income health insurance have different income limits. You might qualify for a premium subsidy if your income is at least at the federal poverty level. In 2023, that's $14,580 for a single person and $30,000 for a family of four.
What happens if you can't afford health insurance?
If you can't afford a health insurance policy, you can look into low income health insurance options for coverage. Programs like Medicaid and CHIP can offer low-cost or free health insurance so you don't have to pay the full cost of your medical bills. Previously, the Affordable Care Act included a tax penalty for not having health insurance coverage. As of January 2019, there is no federal fee if you don't have health insurance, although some states do have penalties.
What is the free health care in the U.S. for low income households?
Medicaid and the Children's Health Insurance Program are low-cost or free health insurance options that low income households might be able to enroll in. Community health centers are also a good option for low-cost health care, even if you don't qualify for Medicaid or CHIP.
Sources
Information about federal poverty levels, mandatory coverage for Medicaid and the status of expanded Medicaid was sourced from:
- HealthCare.gov
- Kaiser Family Foundation
- Medicaid.gov
- Medicare.gov
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