Affordable Care Act: What if you are broke?
October 16, 2013 9:52 AM   Subscribe

I have less-than-no income (under $5000 a year) and I always get Federal tax refunds and "Earned Income Credit" refunds. I have heard that Obamacare will charge people a fine, based on their income. What if my income is sub-poverty?

I remember in 2002, the drumbeat-to-war seemed like it was on the news every night for months and months and months. Well, the 2009-2013 drumbeat-to-Obamacare has been slowly ticking away like a time bomb for four years, and now I think it's really about to go off. I usually just get depressed and I don't listen to all the talk about it, because I have _NO_ money, and _NO_ money to pay for healthcare premiums. I earn $10 an hour at odd jobs and I barely make $5000 a year total income. What should I do about this whole "Affordable Care Act" thing, which they say starts as soon as January?
posted by shipbreaker to Law & Government (14 answers total) 7 users marked this as a favorite
What state do you live in?
posted by mr_roboto at 9:54 AM on October 16, 2013

Best answer: If you are a "Household with an income up to 133 percent of federal poverty line" you are covered by Medicaid, so no penalty.
posted by zippy at 9:55 AM on October 16, 2013 [27 favorites]

More resources here. I work for this place. I don't write 'em, I just post 'em.
posted by rtha at 9:57 AM on October 16, 2013 [1 favorite]

What are you doing for coverage now? Medicaid seems relevant to you. Are you at home? Disabled?

This question is a little too much "How much does a red car cost" in terms of specifics.

Seems you are well withing the guidelines for a free ride on something.
posted by FauxScot at 9:58 AM on October 16, 2013 [2 favorites]

Whether you can get Medicaid or not is going to depend on the state you're in. Some states did not choose the option of expanding Medicaid. If you tell us where you are maybe one of us can point you in the right direction.
posted by mareli at 10:22 AM on October 16, 2013 [2 favorites]

I don't know how much the California implementation of the ACA overlaps with your state's, but for kicks (I'm waiting until less busy to sign up) I looked up how much my potential monthly cost would be if I made $20k/yr and if I made $30k/yr. For both, the least-fancy plan was $0/mo. Slightly fancier plans (lower deductibles, etc) ranged from $40/mo to $140/mo, subsidized 84% and 70%, respectively. My guess is that whatever plan you choose will be fully subsidized for you.

I've had health insurance for a total of 3.5yrs in my adult life--I'm not someone who claims it's unsafe to leave the house without comprehensive care, and I've often been close to broke--but last year I spent seven months making an income slightly higher than yours and enrolled in MassHealth. It was so easy, and completely free. I got same-week appointments in most cases, with really good, attentive care.. A friend of mine, with a similar income as me, had to have minor heart surgery (whatever minor means for heart surgery), and ended up paying $50 for surgery and several days of hospital stay.
posted by tapir-whorf at 10:28 AM on October 16, 2013

If your income is low enough that you don't qualify for the ACA subsidies, and your state governor chose not to accept the Medicaid expansion, then you don't have to pay the penalty. I have a family member in this situation.
posted by donajo at 10:37 AM on October 16, 2013 [4 favorites]

I usually just get depressed and I don't listen to all the talk about it, because I have _NO_ money, and _NO_ money to pay for healthcare premiums. I earn $10 an hour at odd jobs and I barely make $5000 a year total income.

This law was designed to help people like you, not hurt you. Currently I think you do not qualify for Medicaid (unless you have a disability), but if you live in a state that has agreed to the Medicaid expansion part of Obamacare, you will be able to get Medicaid starting in 2014, which costs nothing.
posted by showbiz_liz at 10:39 AM on October 16, 2013 [2 favorites]

If your income is $5000, and you can't be claimed as a dependent on another person's return, then you generally don't have to file a federal income tax return, which means you can't be charged a penalty. If you can be claimed as a dependent, then the person claiming you would be responsible for the penalty. See here. You are exempt from the penalty if there are no "affordable options" meaning premiums less than 8% of your annual income.

Whether you're eligible for Medicaid will depend on which state you live in, as 26 states chose not to expand their Medicaid programs under the ACA (it was originally required but struck down by SCOTUS).
posted by melissasaurus at 10:41 AM on October 16, 2013 [1 favorite]

Please don't hesitate to apply based on the fear that you will be charged a penalty! It is totally unfounded in your case.
posted by Wordwoman at 10:48 AM on October 16, 2013

"States are allowed to opt out of the Medicaid expansion, and some have already elected to do so. This means that people with incomes at 133% of the federal poverty level or lower will be exempt from the ObamaCare mandate if their state has opted out. They are still free to purchase private health insurance through the exchanges, but they are not legally required to do so. "
Obamacare in plain English.
posted by mareli at 11:22 AM on October 16, 2013

I wanted to correct my answer above.

The 133% of poverty guideline does not guarantee Medicaid eligibility, as individual states can (and have) opted out of participating, but it does mean you're not going to get penalized because you would qualify for Medicaid, were it not for your state's opting out.

Here's a UPI article on the subject:

"Not everyone without insurance would be hit with the penalty, which the IRS calls a "shared responsibility payment," The Hill said. People who qualify for Medicaid coverage but reside in states that aren't taking part in the law's expanded Medicaid will be exempt, as will those who are temporarily uninsured while between jobs, those opposed to having insurance coverage for religious reasons or members of Indian tribes."

tl;dr: poverty = no ACA penalty.
posted by zippy at 12:54 PM on October 16, 2013 [1 favorite]

If you are in a state with Medicaid extension, you'll get that.
If not, you won't, but you also won't have to pay the penalty because your income is too low.
posted by rainbowbrite at 3:13 PM on October 16, 2013 [1 favorite]

Note: someone sent me a MeMail saying that their income was $30k; why weren't they turning up $0/mo bronze plans like I seemed to be. So I went back through the Covered CA system, and discovered that the really low-cost plans I'd seen on October 1st when I checked out the signup system aren't there now. The cheapest plan I found was $119. My cheerleading above is totally off-base, and I'm really bummed because I can't quite afford $119 or so either.
posted by tapir-whorf at 12:29 PM on October 17, 2013

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