Government Help for Health Insurance

According to the Society for Human Resource Management, increases in health insurance premiums consistently outpace raises in average annual wages each year. Fortunately, federal and state governments offer Americans and legal residents access to many public health assistance programs, as well as current and future tax credits intended to alleviate the cost of rising health premiums.

Medicaid and CHIP

The federal government established the Medicaid program in 1965, and since then, the program has grown to insure more than 58 million adults and children today. CHIP is an extension of the Medicaid program available to children of households that make too much money to qualify for Medicaid, but too little to afford private health insurance. Though the federal government partially funds both programs, the states pick up the tab for the remainder of the expenses associated with enrollees living in their state. Each state implements eligibility guidelines for its residents, with some states enrolling children in the CHIP program from households with incomes of up to 400 percent of the federal poverty level. Both Medicaid and CHIP cover comprehensive health benefits, though CHIP enrollees may pay a small premium and copay for services through the program.

PCIP

Individuals without access to Medicaid or an employer’s group health insurance may have trouble finding coverage for a pre-existing medical condition. In fact, insurers may choose to charge discriminatory premiums to policyholders with medical conditions, or else offer no insurance coverage at all. The federal government offers these individuals access to a pre-existing condition insurance pool (PCIP) that extends affordable, nondiscriminatory health coverage through private insurers. The insurance is not free or low-cost, but is comparable to the premium that a healthy individual of the same age would pay through a private insurer. To qualify for the federal PCIP, you must have been denied health insurance due to a pre-existing condition and have been without health insurance for at least six months.

Affordable Care Act

In 2010, congress and President Obama implemented The Affordable Care Act — a law which gradually reforms the American health care system over several years time. By Jan. 1, 2014, the law will help Americans who struggle to afford private health insurance premiums by offering tax credits intended to make health insurance more affordable for everyone. To qualify for the tax credits, you must not qualify for Medicaid or have access to an employer’s health plan. Additionally, your household income must fall between 100 and 400 percent of the federal poverty level.

Businesses

Employers who offer group health insurance to employees are not without government aid under The Affordable Care Act. A small business that pays at least 50 percent of its employees’ health insurance premiums may receive a tax credit of up to 35 percent of the business cost of covering employees provided the business does not employee more than 25 full-time employees or pay average annual wages of more than $50,000 per employee. Effective Jan. 1, 2014, the maximum credit amount increases to 50 percent for qualifying employers.