How Do You Find Health Insurance That Fits Within Your Budget?

by Team HomeServe
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Health insurance is essential for protecting your physical and mental well-being, but it's also a significant expense.

If money is tight, understanding how to find affordable insurance can help you secure the coverage you need. Below, you can learn everything you need to know about obtaining cheap health insurance.

What Are the Cheapest Health Insurance Options?

When looking for cheap health insurance, the most crucial factor to consider is the type of plan you need. Some types of health insurance are more affordable than others, regardless of which company you select. Once you've nailed down what coverage you need (and can afford), you can use a price comparison website to find the best deal.

However, it's worth considering the pros and cons before settling on a provider. There's often a drawback to companies offering extremely cheap monthly premiums, such as a restricted doctor network. However, any insurance is better than no insurance, so these companies could still be a good option if you have a tight budget.

Evaluating your health needs when weighing different policies and companies is also essential. For example, basic healthcare coverage may not be adequate if your health is poor. A licensed health insurance agent can help you choose the right option if you're unsure. The following policy types could be a good fit if you need low-cost health insurance.

Bronze Health Insurance

Health insurance policies purchased through the Affordable Care Act (ACA) marketplace have tier ratings reflecting their point-of-care costs and premiums. These tiers are Bronze, Silver, Gold and Platinum. The higher the tier, the lower the out-of-pocket costs — and the higher the monthly premiums.

Therefore, Bronze policies are the cheapest ACA health insurance plans. Bronze health insurance offers cost-free preventative healthcare and covers essential ACA benefits. These benefits include prescription drug coverage, antenatal and newborn care and emergency services.

According to ValuePenguin, Bronze plans cost around $408 per month on average, but you could find cheaper plans by shopping around. Enrollees receiving premium tax credits could receive hefty discounts on their monthly premiums, reducing the cost to under $50 per month in many cases.

However, the downside of Bronze plans is that they come with high deductibles and out-of-pocket limits. Therefore, you could end up paying a considerable amount out of pocket when you receive services, but you'll still pay significantly less than you would without insurance. Therefore, Bronze plans are most suitable for people in reasonably good health.

Silver Health Insurance

Silver plans cost more per month than Bronze policies but offer more comprehensive benefits. They also have lower deductibles and out-of-pocket limits, which means your insurer starts paying for your care sooner.

Like Bronze plans, you could pay considerably less per month for Silver health insurance if you receive premium tax credits. People living in households with an annual income lower than 250% of the federal poverty level may qualify for cost-sharing reductions, reducing the amount they pay when receiving covered healthcare.

Although a Silver plan almost always costs more upfront, it could be cheaper overall than a Bronze plan because of the lower out-of-pocket costs. Consider your general health when deciding whether a Bronze or Silver plan is more cost-effective. Unless you're in excellent health, a Silver plan may work out more cheaply over the course of a year.

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Short-Term Health Insurance

Short-term health insurance is usually cheaper than purchasing regular health insurance through the ACA marketplace, but there are significant caveats.

First, short-term health insurance is less regulated, which means that it may not offer the same coverage as an ACA plan. For example, these policies often don't cover prescription medication. Coverage varies significantly between insurers, so it's essential to check the list of benefits and exclusions before committing.

Another drawback is that you can only purchase short-term health insurance for a maximum of 1 year, and some states restrict coverage to a matter of months. On the other hand, it could plug a gap if you're temporarily on a low income or are due to qualify for employer-sponsored insurance soon.

What Are Your Health Insurance Options If You Have a Low Income?

If you're on a very low income, you could be eligible for Medicaid. Medicaid is a public health insurance program administered jointly by the federal government and individual states. You may also qualify for Medicaid coverage if you're pregnant or have specific disabilities or health conditions, even if you earn more than your state's qualifying income.

All states must cover healthcare costs for children living in households with a minimum income of 133% of the federal poverty level (FPL), and many extend coverage to adults in the same circumstances. They must also cover anyone receiving Supplemental Security Income (SSI). States can elect to broaden their eligibility criteria, so you'll need to check the rules in your area to determine if you qualify.

All Medicaid enrollees are entitled to mandatory federal benefits, including hospital services, laboratory and X-ray services and physician services. Many states offer more comprehensive coverage, which may include prescription drugs, dental care and physical therapy.

Some Medicaid beneficiaries pay a small premium, but states cannot charge premiums if your household income is 150% of the FPL or lower. You may have to pay a small copay or coinsurance when you receive covered services, up to an annual maximum of 5% of your household income.

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