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Health insurance makes medical bills easier to manage, but what about individuals and families in California with less financial stability? If you need medical care but don’t have the necessary funds, you might leverage a government subsidy for health insurance.

What is a subsidized health insurance plan, and how can you get one? This guide explores how these subsidies work, critical eligibility requirements and steps to get a health insurance subsidy.

What Is a Subsidized Health Plan?

A subsidized health insurance plan is a government-funded program that pays for part or all of your health coverage. There are two types available:

• Cost-sharing subsidy: This subsidy lowers your out-of-pocket health care expenses by paying part of your cost-sharing bills like coinsurance, copayments and deductibles. You typically need to be enrolled in a Marketplace^® Silver-qualified health plan to get these savings.
• Premium tax credit subsidy: This subsidy pays a portion of your monthly health care plan. You can have the federal government pay tax credit straight to your insurance provider to lower your monthly premium. Alternatively, you can pay the full premium each month and request your total credit when filing your income taxes.

These subsidies are provided by the Affordable Care Act (ACA), otherwise known as Obamacare.

How Do Health Insurance Subsidies Work?

Your yearly income will typically determine if you qualify for a subsidy. You’ll need to estimate this income and compare it with those in the government’s Federal Poverty Level (FPL) guidelines. The amount you receive depends on your estimated income, modified adjusted gross income reported and benchmark plan.

When eligible, you can use the Health Insurance Marketplace to purchase a premium. Tax credit subsidies related to ACA plans are only available through:

• Marketplace
• Short-term health insurance
• Catastrophic coverage plans
• Insurance supplements
• Standalone prescription drug plans

While they cost less, insurance plans besides Marketplace may offer fewer benefits. If you notice you underestimated your household income after taking tax credit subsidies, you may need to send the money back at the end of the month.

When overestimating your income, you can get an adjusted tax credit refund after filing your tax return. You can also update your Marketplace application to report income changes.

Eligibility Requirements: How Do I Get a Health Insurance Subsidy?

To attain a health insurance Marketplace plan, you first need to check if you are eligible. Here are some of the eligibility requirements to enroll:

• You must live in the United States.
• You must be a U.S. citizen or a noncitizen legally present in the U.S.
• You should not be incarcerated in jail or prison.

To qualify for a subsidy, you’ll need to evaluate your annual income, income level and household size. If your net income is between 100% and 400% of the FPL, you’re eligible for premium tax credits that lower your monthly premium for a Marketplace plan.

Steps to Secure a Health Insurance Subsidy

To apply for health care subsidies, you can either apply directly through the government’s health insurance Marketplace or through licensed agents that cooperate with the government Marketplace. Here are a few steps you can follow to receive a health insurance subsidy that meets your needs:

1. Choose an Entity to Enroll With

Your first option is to enroll with your state’s Marketplace. California’s Health Insurance Marketplace — Covered California — is the only place for Californians to receive tax credits on their health insurance. Enrolling with Covered California offers a great opportunity to take advantage of their Open Enrollment Period for Obamacare.

Better yet, you could seek guidance from a separate entity with Covered California-licensed agents who can help you:

• Determine your eligibility.
• Understand your unique needs.
• Find the right fit.
• Calculate your health care subsidy.

2. Collect the Relevant Documents

After you’ve chosen an entity to enroll with, you’ll need to gather all the relevant documents and information for a smooth application process. It’s important to ensure this information is as accurate and up-to-date as possible. Critical information to provide includes:

• Personal details: Include the full legal names and birthdates of the household members you plan to include in the coverage. If you’re a legal immigrant, you may provide social security numbers instead.
• Immigration and citizenship status: In some cases, you’ll need to provide proof of your immigration and citizenship status with immigration-related documents like a Certificate of Naturalization and a Green Card.
• Household information: State the people in your household who need coverage and whether they receive health insurance through their job.
• Income information: Provide tax return information and your estimated household income for the year you apply for. Include all income related to federal taxable wages, self-employment income, social security and unemployment compensation.
• Health coverage information: Include details about any job-related health insurance, even if you aren’t using it. You should also disclose whether you or any household members have or are eligible for health coverage through an employer, Medicaid, Medicare or other providers.

3. Verify Your Eligibility

During this next step, you can have someone help you through the financial eligibility verification process. Licensed agents can assist you through a confidential discussion. These professionals will evaluate your provided documents and information to verify your eligibility.

4. Choose a Suitable Health Plan

If they determine you’re eligible, these agents may help you explore:

• Different health plan terms and conditions.
• Coverage options and their out-of-pocket costs like copays, coinsurance and deductibles.

They will then estimate the amount you’ll need to pay and calculate the financial help you’ll need based on your income, household size and where you live.

5. Finalize the Process

To ensure you fully understand the terms and conditions, review the health insurance document and ask questions about anything unclear. If your budget allows, you can also add vision or dental coverage after understanding the specifics of your payments and coverage. Once you’re confident in your choice, you can pay the first bill to complete your enrollment.

Get a Health Insurance Subsidy With Health for California

Health insurance subsidies can be a valuable asset if you need medical bill assistance. By visiting Covered California and taking advantage of Obamacare, you may be able to fulfill those needs. Do you need assistance right away?

At Health for California, we have agents licensed by Covered California and the California Department of Insurance to help you through the entire process, from calculating your government subsidy to successfully enrolling for a health plan. We’ll also help you determine whether you qualify. Our team takes the time to understand your budget and unique needs to ensure you get the right coverage and subsidy.

For expert assistance, get a free quote so we can start discussing your enrollment today.