How to Apply for Financial Assistance to Pay for Health Insurance

Many Americans rely on some form of financial assistance to meet their health care needs. This financial help can reduce the cost of health insurance for individuals and families.

As of June 2023, almost 93 million people were enrolled in Medicaid. And, according to the Kaiser Family Foundation, 91% of those with federal Marketplace health plans in 2023 received some form of financial assistance.

Health insurance is expensive, but also essential. So it's important to learn about any financial assistance to pay monthly premiums and lower your out-of-pocket costs.

What Kind of Financial Help Is Available

The Affordable Care Act (ACA) makes insurance more affordable than ever, especially if you're lower income. Medicare, Medicaid, the Children’s Health Insurance Program (CHIP), tax credits, and cost-sharing tools combine to create a network of assistance. Eligibility for these programs is based on location, age, income, and family size.

Medicare

Medicare is a federal health insurance program that covers people 65 and over, as well as some younger people with disabilities, and people living with End-Stage Renal Disease or ALS (Lou Gehrig's Disease).

Part A and B (Original Medicare)

Part A (hospital insurance) covers hospital and nursing home stays, and at-home care for people who are homebound. Part A is free for anyone who has earned 40 Social Security credits, which is about 99% of beneficiaries. Even so, in 2024, it comes with a $1,632 deductible for the first hospital admission during each new benefit period and sizeable co-payments for stays over 60 days.

Part B is optional medical insurance with a standard monthly premium of $174.70 and an annual deductible of $240 in 2023. The monthly premium is higher for individuals with income above $103,000 and couples whose income exceeds $206,000.

Part C (Medicare Advantage)

Medicare Advantage is an alternative to Original Medicare. Parts A and B coverage provided by private insurers. Premiums, deductibles, and copayments vary with each plan.

Part D (Drug Coverage)

Part D covers prescription drugs. Monthly premiums vary based on the plan and the beneficiary’s income, but deductibles are capped at $505 for 2024.

Medicare Supplement Insurance (Medigap)

Medicare Supplement Insurance (Medigap) helps cover the costs for some Part A & B services and may include extra benefits, like international coverage, though it comes with its own premiums that vary by plan and personal circumstance. There is no annual limit on how much an Original Medicare beneficiary pays out of pocket unless they enroll in a Medigap K or L plan.

Medicare Assistance Programs

If you find it challenging to pay the costs that Medicare doesn't cover, financial assistance may be available to you if you fall into one of the following categories.

Low Income

Medicare Savings Programs are income and resource-restricted programs that help pay Parts A & B premiums, as well as deductibles, copayments, and coinsurance in some cases. These programs are administered by state medical assistance (Medicaid) offices, but they are not the same program as Medicaid. To apply, contact your state’s medical assistance office.

Some people qualify automatically for Extra Help, a program to help people with limited resources pay for Medicare Part D coverage and costs. Those who don’t automatically qualify can still apply. And some pharmaceutical companies offer additional assistance to help people with Part D prescription drugs.

Special Needs

Assistance programs also exist for people with specific medical needs. For example, the Program of All-Inclusive Care for the Elderly (PACE) helps people 55 and over get care outside of a nursing home, and Medicare Special Needs Plans lower costs for people who need long-term care (at home or in a facility) or have a chronic condition like dementia, cancer, or diabetes.

Medicaid

Medicaid is a state-federal insurance program to help pay for primary and acute-care services, and long-term services and supports.

Because Medicaid is administered by states, eligibility and costs vary widely. But federal rules require coverage for people who are low-income and also qualify due to one of being:

• Certain low-income families, including parents, meeting financial requirements
• Pregnant women with annual income at or below 133% of FPL
• Children and infants from homes with annual income at or below 133% of FPL
• Aged, blind, or disabled individuals who receive cash assistance under the SSI program
• Children receiving foster care, adoption assistance, or kinship guardianship assistance under Social Security Administration
• Some former foster care youth
• Individuals eligible for the Qualified Medicare Beneficiary program
• Some legal permanent resident immigrants

However, income requirements vary widely by state. This is because some states offer expanded Medicaid, and also cover individuals who are up to 138% of

While states can charge some Medicaid recipients premiums and out-of-pocket costs, savings can be significant. For some people, these benefits can bring down the cost of drugs to just $8 and a visit to a physician to just $4.

Some people who are eligible for Medicare are also eligible for Medicaid. This is called "dual eligible."

Children's Health Insurance Program (CHIP)

The Children's Health Insurance Program (CHIP) provides health coverage to children in families earning too much to qualify for Medicaid. CHIP, like Medicaid, is state-run according to federal guidelines.

Eligibility varies by state, but CHIP gives kids and teens free or low-cost dental and medical insurance. InsureKidsNow.gov can help you determine eligibility and find local providers.

ACA Plan Help

If you need help paying for insurance you purchase on the ACA, two important programs may be able to reduce your costs.

Premium Tax Credits

The premium tax credit (PTC) helps cover health insurance premiums, if you buy insurance through state or federal Health Insurance Marketplaces. Before 2021, households with income above 400% of the federal poverty level did not qualify for the premium tax credit, but that rule has been suspended until 2025.

When you apply for coverage through the Marketplace, it calculates a tax credit estimate on your behalf. You can claim the credit later, when you file taxes. The tax credit is a refundable credit, so you'll get a refund of the premium portion that qualifies.

Or you can have monthly payments sent directly to your insurer. This is called an advance credit. If you choose to have your payment sent to your insurer, you must reconcile your estimated and actual credit on Form 8962 when filing taxes in April.

To minimize surprising tax bills, notify the Marketplace of any life changes, such as a higher or lower income.

Cost-Sharing Reductions

Cost-sharing reductions are also called “extra savings,” and apply to private health insurance purchased through the state or federal Marketplace. These reductions lower your deductibles you must pay before your insurance begins covering costs. The reductions can also lower what you pay out of pocket on coinsurance and copayments.

Like the premium tax credit, the Marketplace automatically calculates your eligibility for cost-sharing reductions when you apply. To claim reductions, you must enroll in a Silver health plan.

Members of a federally recognized American Indian tribe or shareholders of an Alaska Native Claims Settlement Act (ANCSA) Corporation may be eligible for additional cost-sharing reductions.

How to Qualify for Financial Aid

Qualifying for Medicaid, some Medicare programs, and other public assistance programs vary by state. Consult your state’s Medicaid office to learn more. For additional Medicare assistance or questions, you can contact a live person 24/7 via live chat or phone.

In general, getting help with health insurance costs depends on how your income compares to the Federal Poverty Level, which is reset annually. Your income can help you save on Marketplace premiums, or qualify for Medicaid or Children's Health Insurance Program (CHIP).

But think carefully before declining or canceling job-based insurance to sign up for a Marketplace plan. If an employment-based plan is "affordable" and meets some minimum requirements, you can't get Marketplace savings even if your income would make you otherwise eligible.

How to Apply for Health Insurance Financial Aid

Applying for most health insurance financial aid starts with the Marketplace. If you live in a states with its own marketplace (such as California), the federal website will redirect you to that marketplace. Medicare beneficiaries in need of assistance should contact their state's Medicaid office.

To apply for assistance, you may need to provide documentation supporting your claims, including confirmation of immigration status, citizenship, social security number, household income, and American Indian or Alaskan Native status.

If you're at risk of taking on medical debt even with insurance, individual hospitals have financial assistance or charity care programs to defray unexpectedly high bills. Many hospitals use charity care applications to determine if a patient qualifies for one or more of the government programs above, and others—like Ohio Health—offer interest-free loans to patients who do not qualify for other discounts.

The Bottom Line

The rising cost of health care in America keeps many people up at night. However, federal and state programs like Medicare, Medicaid, and CHIP provide millions of Americans with low-cost insurance, and the Affordable Care Act inaugurated several insurance subsidies and cost-saving measures, like the premium tax credit. And for people who are caught with a medical bill that is bigger than they expected, charity care programs can help both uninsured patients and those whose insurance does not cover the full cost of care.