The Impact of Health Insurance on Your Financial Health


When people get sick, they require health care in order to seek the help they require to get better. But aside from helping us get the best quality of care, health insurance also protects our finances.

Most people have very low health expenditures but there are also those who have huge health expenses owing to serious illnesses or chronic conditions. And this is where a good health plan comes in – to protect people against expensive health care that could otherwise lead to financial ruin. Smart individuals always check health insurance quotes to help them find a plan that is affordable and at the same time, has all the benefits they need.

The 2010 Patient Protection and Affordable Care Act

The passage of this law, also known as the Affordable Care Act, was driven behind the need to protect America’s citizens against financial hardships. In 2009 before the ACA took effect, the nation’s uninsured rates hit close to 17%. The ACA aimed to lower this number and one of the ways it did this was by expanding Medicaid to include all adults whose income were 133% of the poverty line. But in 2012, it was determined by the U.S. Supreme Court that Medicaid expansion should not be required for all states and as of early 2016, 19 states have refused to expand the program despite knowing that states with Medicaid expansion have a more significant decrease in uninsured rates than those who did not.

Medicaid Expansion Impact on Personal Financial Health

While it’s still too early to know the full effects of the health care reform, we already have a good idea of how the law can affect a person and his finances. They are as follows:

  1. Uninsured individuals now have more affordable options. You can shop for affordable health insurance plans using the Internet-based health insurance marketplace.
  1. Health coverage will be expanded. Today, you can no longer be denied coverage if you have a pre-existing medical condition. The ACA also extends coverage of children up to the age of 26 which means that they can stay on their parents’ plan until they reach this age.
  1. Medicaid is offered to individuals under 65. Now, Medicaid is no longer just limited to seniors. If you have an annual income of less than $15,300 (individual) or $31,155 (family), you’re qualified to get Medicaid.
  1. You may qualify for a government subsidy. The subsidy will help you pay for your insurance expenses. So, if you buy your health plan through the marketplace (also called an exchange) and your annual income is less than $45,960 (individual) or $94,200 (family), you could be eligible for a subsidy in the form of a tax credit which will be applied directly to your premiums.
  1. You’re covered under the law if you have health insurance. If your employer provides health care, or if you currently have Medicaid or Medicare, then you may not need to buy health insurance through the exchange.

In its aim to decrease the number of uninsured in the United States, the ACA has also implemented a tax penalty for those found to be without a health plan. If you can afford health insurance but have opted not to have one, then you’ll be fined a penalty. For 2016, the penalty is 2.5% of your household income or $695 per adult and $347.50 per child under 18, whichever is higher.