5 Things to Know About Qualifying for a Healthcare Subsidy in Retirement, #93
Retirees often wonder how they are going to afford health insurance if they retire before the age of 65. Thankfully, many Americans qualify for healthcare subsidies through the Affordable Care Act (ACA). On this episode, I’m going to cover the five things you need to know about these subsidies and how you can become eligible for them.
You will want to hear this episode if you are interested in...
What are ACA tax credit subsidies?[1:24] They are available to many people whose net income is between 100%-400% of the Federal Poverty Level
Exploring eligibility for ACA tax credit subsidies [2:17]
How does the federal government determine the poverty line? [5:33]
The logistics of signing up for healthcare through the Marketplace [6:53]
How do ACA tax credit subsidies work? [9:35]
What info do I need to get started? [11:32]
How do I apply for an ACA tax credit subsidy [14:19]
Reducing the cost of healthcare
The years before retirement can be both exciting and nerve-wracking. That’s why retirement planning is an essential step! Set yourself up now so that life’s third act is enjoyable and stress-free. One major stressor most soon-to-be retirees face is figuring out healthcare coverage. Especially, if it’s not currently provided by an employer and they don’t yet qualify for Medicare due to age. Never fear, because the Affordable Care Act (ACA) may be the way to go. The ACA, also known as “Obamacare”, provides subsidies to qualifying individuals and families to help make healthcare costs more affordable. This is a great option to gain health insurance at a reasonable cost until you reach age 65 and qualify for Medicare.
These subsidies are available to many people who qualify and the money is put towards significantly reducing your health insurance premium. In some cases, it can even make healthcare free! In 2020, it was estimated that 87% of the roughly 11 million people enrolled in the Healthcare Marketplace received a premium subsidy. If you don’t qualify for Medicare and you haven’t looked into this yet, what are you waiting for?
Do I qualify?
While the idea of affordable health insurance is appealing to everyone, some requirements need to be met in order to qualify. ACA tax credit subsidies work on a sliding scale that limits the amount you pay each month for health insurance premiums based on your modified adjusted gross income (MAGI). Most people are eligible for these subsidies if they annually earn between 100% and 400% of the Federal Poverty Level. However, in March of 2021, the American Rescue Plan Act (ARPA) added further relief to those struggling to find affordable health insurance during the COVID pandemic.
For 2021 and 2022, many retirees can take advantage of several ARPA provisions that will further reduce their healthcare costs. For example, no citizen or legally present non-citizen without access to other affordable healthcare options will pay more than 8.5% of income for a Marketplace Silver Plan. Additionally, individuals who earn 500% of the Federal Poverty level and don’t have access to other affordable healthcare options can take advantage of cost-sharing reductions through low-cost Healthcare Marketplace plans. For more information on reducing your healthcare costs and qualifying for subsidies, listen to this episode!