Avoid Mistakes and Gain in Health Insurance Subsidies

by Vanessa Jones on December 30, 2014 at 3:03 PM
 Avoid Mistakes and Gain in Health Insurance Subsidies

Federal subsidies make monthly premiums affordable so avoid some common errors while signing up for health insurance. Consumers should research for the right plan before they enroll themselves for a health insurance plan. Open enrollment is open till February 15th; they should look for a plan which reduces their premium by offering a tax subsidy.

Health insurance subsidies are given out to household incomes which typically fall between 133% and 400% of the federal poverty level or up to about $46,000 for a single person or $95,000 for a family of four. Applying for subsidies can be a bit of a challenge.


Carrie McLean, director of customer care at, an online health insurance exchange based in Mountain View, California feels one should not get carried away with the deductions in the open enrollment. "When applying for health insurance premium subsidies, applicants are sometimes tempted to treat the process like doing their taxes and get a little over creative with their deductions," she said. While you should report any deductions that are appropriate, be aware that adding too many can push your income too low; in that case, you may no longer be eligible for subsidies, but potentially eligible for Medicaid instead.

Whether you're truly eligible for Medicaid, however, is a different story," McLean said. "Applying for Medicaid involves a different process in many states." Another mistake people make is underestimating their income, especially if they are self-employed and are used to "low-balling their income for tax purposes," she said. "Underestimating your income can actually push you below the threshold for subsidy eligibility," McLean. "Remember that once you qualify for subsidies, any discrepancy in the subsidies you were actually due and what you received during the year will be reconciled when you file your federal tax return for the year," she said.

For changes in your income inform the insurance company or enrollment agency, said Michael Mahoney, senior vice president of consumer marketing for GoHealth, a Chicago-based online exchange for health insurance. The amount of subsidy can be adjusted.

Choose your plan - keeping your personal details and dependents in mind. The eligibility of the subsidy is based on your household income and the people who will be covered by any plan you may choose to enroll in. The information you supply in your subsidy application will be double-checked against government records. Source: Ellen Chang

Source: Medindia
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