09 Sep How can I qualify for Obamacare subsidies?

Q. How do I qualify for subsidies to help pay for my private medical insurance for me and my son? With the death of my spouse and much lower income, I would like to keep the same plan but at a little less expense. The Affordable Care Act sites are very confusing.
— Needing help

A. We’re sorry to hear about the loss of your spouse.

Choosing the right health insurance plan — at the right cost — will depend on many factors, but let’s discuss some of what you should consider.

If your current health insurance was through your spouse’s employer, you are probably eligible to maintain that coverage for 36 months through the Consolidated Omnibus Budget Reconciliation Act, commonly called COBRA.

The COBRA cost of coverage is capped at 102% of the employer’s cost of the plan, but this may still be more than your spouse was paying previously, said Peter McKenna, a certified financial planner with Modera Wealth Management in Westwood.

He said your son should also be eligible until he reaches his 26th birthday, but it may make sense to shop for plans for each of you separately depending on your health and circumstances.

If your income is low enough, you may also qualify for Medicaid, he said.

Now, on subsidies.

“The American Rescue Plan (ARP) enacted after the pandemic has increased subsidies and extended eligibility,” McKenna said. “If you can get health insurance through your employer, you are likely not eligible for subsidies.”

To see your eligibility, he recommends you use this Kaiser Family Foundation calculator.

This site allows you to enter your state and county of residence, family size, income, and more, and it will help you get a better sense of any subsidies you may be eligible to receive, McKenna said.

“The ARP caps the expense at 8.5% of family income, but it is unclear if these higher subsidies will be renewed beyond 2022,” he said.

For example, he said, subsidies for a Bergen County family with one adult, age 50, and one child, age 15, will phase out at around $100,000 of income. In order to look at your options, visit the site for New Jersey residents to get started.

Your spouse’s passing is considered a “qualifying life event” that will allow you to enroll in a new plan mid-year, but it may be prudent to stay on COBRA for the remainder of the plan year if you’ve missed a deadline to receive a subsidy for 2021, McKenna said.

“If significant medical expenses were incurred this year, you may have already met plan deductibles or out-of-pocket maximums for 2021,” he said. “This could result in more predictable costs for the remainder of the year in a plan you are already familiar with.”

Starting a new plan mid-year could cause you to cover deductibles again, he said.

“Open enrollment for 2022 will open up in the coming months and you won’t need a `qualifying life event’ to get coverage for the new year,” McKenna said. “Look for plans that include your existing doctors and health care providers and compare to any coverage you can maintain through COBRA.”

And if your son is attending college, you can also compare a subsidized plan to the plans offered through the school as they are sometimes a good value for young, healthy individuals, McKenna said.

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This story was originally published on Sept. 9, 2021

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