How to Find Affordable Health Insurance (Health Insurance for LGBTQ Folks Ep. 2)

In the second episode of our Health Insurance for LGBTQ People series, we discuss all the potential ways to get health insurance coverage so you can find the one that's best for you.

Time stamps:

00:41: Employer-sponsored coverage

02:21: Medicaid

04:25: Medicare

06:06: Uninsured folks

06:48: Direct-purchase insurance

07:58: How expensive is health insurance through the marketplace?

08:26: What are premium tax credits?

09:38: How to enroll in marketplace health insurance

10:36 What are Special Enrollment Periods?

Transcript:

Hi, I’m Ben, welcome to Episode 2 of our health insurance training for LGBTQ folks. In our first episode, we talked about all the reasons that getting health insurance is a good idea. Now, I hope I half-convinced you, but I know you’ll be skeptical until you find an insurance plan that fits your budget.

So, in this episode, we’re going to cover all the ways that people in the United States get health insurance and figure out which one is the right fit for you. Spoiler alert, in future episodes, we're mostly going to be talking about Marketplace coverage, but if you have other potential options for getting covered, marketplace insurance might not be the most cost-effective, so I want to give an overview of all of them first.

Employer-sponsored coverage

So first on our list is employer sponsored coverage. According to the Kaiser Family Foundation, just about half of all Americans get their health insurance through their employer. If you have access to this, it's probably the most cost effective way to go.

Employers in the US are actually required to offer health insurance to all full time employees, if they have more than 50 full time employees or a certain number of part time employees that adds up to the equivalent of 50 full time employees. There are different requirements in different states, but this is the federal requirement under the Affordable Care Act.

It is important to know that employer sponsored plans can have a waiting period of up to 90 days. So if you start a new job, just know that your health insurance might not kick in right away.

So how much does employer sponsored coverage cost?

Generally, employer sponsored plans pass along about a quarter of the costs to the employee, which you'll see taken out of your paycheck each month. You will get some different options based on different metal levels, which we'll talk about in a future episode. But it's important to know that the employer contribution may be capped or based on the lowest value option.

If you're single, the employer contribution is an average of 83%, which means that your pay is 17% of your plan premium each month. And this comes out to roughly $1,000 to $2,000 per year. If your employer offers family coverage or special coverage, the average employer contribution goes down to 73%, leaving you with 27%, and that'll come out to about $6,000 to $7,000 total annually for your whole family plan.

Medicaid

The next most utilized insurance that we're going to be talking about is Medicaid. Medicaid is a federally funded program that provides health insurance to low income folks. I'm going to be talking about Medicaid as if it's one entity, but if you go this route, you may also hear the acronym CHIP, which is the Children's Health Insurance Plan.

So it varies state to state how much you can make in order to qualify for Medicaid. In general, in states with Medicaid expansion. This number is 138% of the federal poverty line. For 2025, In most states, the federal poverty line is about $15,000 for an individual or $32,000 for a family of four. So 138% of that would be about $22,000 for an individual, and just over $44,000 for a family of four. This is in the contiguous United States because in Alaska and Hawaii, the federal poverty line is a little bit higher. So the threshold is also a little higher.

What is Medicaid Spend Down?

Actually, sometimes you can still qualify for Medicaid if you make more than this. There's a program called Medicaid Spend Down where basically you pay a portion of your income down for all medical expenses as if it was a deductible. And then when you get down to the Medicaid threshold, then the Medicaid kicks in and this is a good option for folks who have residential care needs or recurring high medical expenses.

What is Medicaid Buy In?

There's also a program called Medicaid Buy In, which is for folks living with disabilities to allow them to continue working and making above the threshold. And then basically paying a monthly premium based on their income to qualify for Medicaid. The point here is that if you think you might qualify for Medicaid, you should go ahead and apply. And then you can ask about these programs if you are over the threshold.

Aside from these programs I mentioned, Medicaid generally doesn't have monthly premiums, though there might be out-of-pocket expenses for certain care.

Medicare

Next, I want to go ahead and talk about Medicare, which goes hand-in-hand with Medicaid, because it's the other federally funded health insurance coverage program.

Medicare is available to everyone over 65 years old. And in some cases, if you are collecting Social Security benefits, it's actually mandatory that you enroll in Medicare. Now, if you are still working and have coverage through an employer sponsored health plan, then you can delay enrollment into Medicare. It's just important that you check and make sure that you're eligible to delay enrollment, because if you're not, there are late enrollment fees.

So the way that Medicare works is that it's partly covered by the federal government. And then partly you can pay for supplemental coverage through a private insurance company. You don't need to, but you can. And if you do, it will work in tandem with your Medicare, not instead of.

What are the four parts of Medicare?

So Medicare has four parts to it. Part A is hospital coverage, which is free for everyone. It's paid by the federal government. Part B is general medical coverage. It comes with a monthly premium of $185, but it could be higher for you based on your income.

Part C is the supplemental insurance I was talking about. This is called Medicare Advantage. And you can decide to get this or not to get this. This would be a contract between you and a third party insurance company. This is not provided by the federal government. And then part D is for prescription drug coverage. This is also provided by a third party private insurance company. And on average it costs about $50 a month.

Uninsured individuals

The next largest section of this chart is actually uninsured, folks. This represents about 26 million Americans who don't have health insurance for at least part of the year, though this also includes native folks who are covered under the Indian Health Service because the IHS isn't considered comprehensive coverage. The reason for that is partly that it's more of a service provider than an insurer, because you have to go to an IHS facility to get care, and partly because the IHS is too underfunded in general to cover comprehensive services and be considered comprehensive health insurance coverage.

Direct purchase

Now, the next group here is people who have insurance through direct purchase and this means directly with an insurer. This includes marketplace coverage, which I'll come back to in a minute, and it also includes things like a university health plan for college students.

Military coverage

The last little sliver here is people in the military and their families. So about 1% of folks are covered by TRICARE, which is for active service members and their families, or covered under Veterans health care, which is by the Department of Veterans Affairs.

Marketplace coverage

So now that we've gone over all the ways that people in the United States get health insurance, let's dive a little deeper into the marketplace. So if you can't get insurance through an employer, if you're not over 65, and if you don't meet the income requirements for Medicaid, you can get insurance through the marketplace. The marketplace is designed to be available to anyone.

Marketplace health insurance is available from healthcare.gov. Or if you live in a state that has a state based marketplace, you can go to healthcare.gov and choose your state, and it'll direct you to your state based marketplace website.

How expensive is health insurance through the marketplace?

For 2025, the average that you might hear is $497 as an average monthly premium. But this very substantially by state, and this average is actually the benchmark plan, which is in the middle tier of plan options. So you can find options that are both cheaper and more expensive than that. And we haven't even talked about tax credit yet.

What are premium tax credits?

When you enroll in health insurance, the marketplace application is going to ask you for your estimated income for the year. And this is so that they can provide you what's called premium tax credits. Now there are two ways to do this.

First, you can agree to have this tax credit taken out of your monthly premium. So you'll pay a cheaper monthly premium. And then at the end of the year, based on your actual income, you may owe a little bit or get a little bit extra back. If the premium amount that you paid was still too high.

The other way to do this is to not take it out during the year. And then at the end of the year, you'll just get a huge chunk back as a premium tax credit. And this is why when you submit your taxes at the end of the year, you will also submit a document from the marketplace showing how much you paid every month as your monthly premium.

Finally, I want to note here that if you qualify for Medicaid, then when you go through the marketplace application, it will actually let you know that based on your income level, you've qualified for Medicaid and do you want to proceed with that?

How exactly do you get marketplace insurance?

Well, there's an open enrollment period, which is the one time during the year that anyone can apply through healthcare.gov or your state based marketplace and sign up for insurance. Certain states have longer windows, but it's important to keep in mind if you want your health insurance to start on January 1st, you should enroll by December 15th. Otherwise, if you enroll after December 15th, your coverage might not begin until February 1st of the next year.

If you miss the open enrollment window, you may not be able to sign up for health insurance at all for the following year. So it is important to keep this date in mind and remember that at any point during open enrollment, you can change your plan, enroll, cancel. But if you change your mind mid-year, you only have the option to cancel your health insurance. You won't be able to change it or enroll in a new plan until the following open enrollment period.

What are Special Enrollment Periods?

However, there are a lot of other ways that you could qualify for what's called a special enrollment period. So if you have a qualifying life event, then you will be given a special enrollment period window, during which you can sign up for health insurance through the marketplace.

There are a lot of reasons that someone might qualify for a special enrollment period. I'm not going to go into all of them, but just remember that if you lose health insurance during the year for any reason, go ahead and check on healthcare.gov if you qualify for a special enrollment period. I'll give you a couple examples of some reasons.

So for example, if you lose your job and you had employer sponsored coverage, or if your spouse or your parent had employer sponsored coverage for you and they lose their job, then you all can go ahead and sign up for health insurance through the marketplace.

What is COBRA health insurance?

And I do generally recommend this above enrolling in COBRA. COBRA is a way that you can extend your employer sponsored coverage for up to 18 months, but keep in mind that you will end up paying the entire monthly premium, both what you had previously been paying and what your employer had been paying, so it's probably not going to be the cheapest option. It'll be better for you to just go ahead and enroll through healthcare.gov.

What are other Qualifying Life Events?

So some of the other qualifying life events that would give you a special enrollment period would be if you get married, have a child or adopt a child, move to a different state, leave incarceration, gain U.S. citizenship, if you had university health insurance and then you graduate or leave your school, if the person providing your health insurance like a spouse or parent passes away, or if you get divorced.

So these are all different ways that you could qualify for health insurance throughout the rest of the year, not specifically during the open enrollment period. Basically, the point is, if you lose health insurance for any reason, go ahead and look at healthcare.gov. Try to apply for health insurance and if you are not accepted, then they'll let you know.

So children can be on their parent's health plan up to the age of 26. If that's an employer sponsored plan that offers coverage for children, if it's a marketplace plan or if it's a medicaid plan, you would be on CHIP. Obviously, if your parent is on Medicare, you would not qualify for that because you're not over the age of 65. And then you would have to go ahead and sign up for marketplace coverage.

You can also sign up for marketplace coverage at any time if you're not connected to your parents. Say, if you're a financially emancipated minor. Basically, if your parents count you as a dependent on their taxes, then you can get coverage through them.

What happens to my health insurance when I turn 26?

Now, when you turn 26, you may also lose coverage if you are covered through your parent's employers plan. You're probably going to lose coverage at the end of the month. So you'd qualify for a special enrollment period for probably the month before and after that, which gives you an opportunity to sign up for marketplace coverage for the rest of the year.

If you're already on your parent's marketplace health insurance plan, then your coverage is going to continue through December 31st of that year. So the next year when you're 27, you're going to need to sign up for your own health insurance through the marketplace.

I also do want to emphasize that, as I mentioned, special enrollment periods can be different lengths of time, generally it's 60 days, but it may depend based on your qualifying life event. It also depends if it comes before the event date or after. That's generally if you knew the event was going to come up. And so it's really important that you go ahead to healthcare.gov and check and see if your qualifying life event covers you, and if so, what the dates are that you need to get coverage by.

All right. So now that we've covered all the different ways that you could get health insurance coverage in the next episode, we're going to figure out how to pay for that. So we're going to be looking at premiums and deductibles, co-pays and co-insurance and all the terms that you need to know so that you can figure out which plan fits your budget.