Affordable Care Act or Medicaid: Which Is More Affordable?

The question as to whether ACA health insurance or Medicaid is more affordable has a short answer and a long answer.

The short answer is that it depends on the person’s situation.

The long answer is long indeed! A person’s eligibility for health insurance under the Affordable Care Act is controlled by a law that is more than 900 pages long. There are hundreds more pages regulating Medicaid in the individual states.

The Affordable Care Act (ACA) is also known as Obamacare, and it was passed to ensure more Americans had access to health insurance and were not affected by insurance companies trying to restrict care. Before the ACA, many people trying to get health insurance hit a barrier if they had preexisting conditions. There simply wasn’t any insurance available to them because insurance companies were permitted to exclude those with preexisting health conditions.

Sometimes, an insured person was forced to stay in a job for years to maintain health insurance that covered their own or a family member’s preexisting condition. With the ACA, they could finally change jobs or move their household and get new insurance coverage.

The other problem many people encountered was that premiums were so high they couldn’t afford insurance.

The Biggest Factor in the Question of Health Insurance Affordability

It basically comes down to income levels. Those with lower incomes will qualify for subsidies under the ACA. This means that the federal government reduces their premiums, calling this subsidy a “premium tax credit.” Their premiums become more affordable and any preexisting conditions are covered.

However, if a person’s income is too low, they may not qualify for a subsidy or for insurance under the ACA. They may be able to get health insurance by applying to their state’s Medicaid program.

If they apply for insurance under the ACA and don’t qualify due to low income, the federal government will automatically forward their application to the individual’s home state to begin the person’s enrollment in Medicaid.

Why Some People Don’t Want Medicaid

Many people don’t want to be covered by Medicaid because so many doctors don’t accept this insurance. Individuals and families covered by Medicaid really lose the power of choice over who provides their healthcare.

The benefits under Medicaid also vary greatly by the state administering the program. The federal government has no control over how the Medicaid systems are administered in each state.

Low Income, High Assets

It can happen that a person has high assets but a low income. We sometimes see this with early retirees who are receiving pension payments. Their low income may disqualify them for ACA coverage so they must apply for Medicaid. They are too young for Medicare, but their ample assets disqualify them for Medicaid. At that point, they can then apply for subsidized health insurance under the ACA. Their assets won’t matter when they apply for ACA coverage, only the total taxable income of the household.

Yes, it’s an annoying merry-go-round. That’s why so many people in Missouri and Illinois come to us for guidance. With our many years of experience, we can make this process much less confusing. We know the laws that affect your ability to get insurance and how to get you the best price. We can help you benefit from any laws that work in your favor.

When you consult us for assistance enrolling in a health insurance plan, we can make the tedious process of obtaining the best health insurance coverage simpler and much faster. We work for you, not the insurance company. Call us at (314) 544-5400 and let us know how we can help you or your family.

 

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