When you are a single parent, it can be hard to find an affordable health insurance plan for yourself and your children. Thankfully, you have a few options to choose from.
- Medicaid is a government program that helps pay for healthcare for low-income families. For many low-income single parents, this may be the only coverage option.
- The Children’s Health Insurance Program (CHIP) is another option for single parents to obtain free or low-cost health insurance.
- If your employer covers at least part of the cost of a health insurance plan, it may be your best option.
- Single parents who do not qualify for Medicaid may still be eligible to receive subsidies to help pay for insurance through the Health Insurance Marketplace.
- You may need to purchase a short-term plan to bridge the gap between employer-sponsored plans.
- You should be able to be included on a parent's plan until you reach age 26.
Medicaid is a government assistance program designed to help pay for health care for low-income families. For many low-income single parents, this may be the only option for coverage. Medicaid programs are jointly funded by states and the federal government.
Each state has its own eligibility requirements that consider income, family size, and whether someone in your family has a disability, among other factors.
Starting in 2014, the Affordable Care Act (ACA) enabled states to begin expanding Medicaid coverage to include residents with income below 138% of the federal poverty level (FPL). The actual percentage set by the ACA is 133%, but the effective percentage is 138% because 5% of an applicant's income is disregarded.
The federal government paid for the entire cost of Medicaid expansion for three years. It then lowered the percentage covered until, in 2020, it reached 90%, where it remains. States cover the remaining 10% of costs.
The federal poverty guidelines (FPL) change according to the number of people in your family. And there are also separate FPLs for Alaska and Hawaii.
The U.S. Department of Health and Human Services has a website that lets you determine the FPL for your family in 2021. For example, the FPL for a family of four living in one of the 48 contiguous states or the District of Columbia is $26,500. If you multiply that figure by 1.38, you get an income level of $36,570.
The Children’s Health Insurance Program (CHIP) is another option for single parents to obtain free or low-cost health insurance. The CHIP program, which is also paid for jointly by states and the federal government, may be an option for you if your income is too high to qualify for Medicaid.
Income level and the types of covered care vary by state, but all state CHIP plans cover these services: doctor’s visits, immunizations, routine check-ups, emergency services, prescriptions, dental and vision care, laboratory work, x-rays, mental health services, and inpatient and outpatient hospital care. All CHIP programs cover children up to at least age 19.
With CHIP, there is no charge for well-child doctor or dentist visits. Charges for other services vary, but charges per year are limited to no more than 5% of your family’s annual income.
If your employer offers health insurance, it is likely to be your best option, as long as your employer pays for part of your premiums. Few employers pay for the entire cost of premiums, and the amount paid by the employee can be significant.
As of March 2020, 94% of civilian workers who received family health insurance coverage from their employer had to contribute to the premiums, according to the U.S. Bureau of Labor Statistics. The average annual contribution for employees was $6,797, compared with $13,717 for the employers. That meant the employees were responsible for 33% of the premium cost, on average.
Under the ACA, for an employer-provided plan to be considered affordable, the cost of the least-expensive individual-coverage-only option can not exceed 9.83% of your household income for the year. The cost may exceed that percentage of your income and still be considered affordable when you are adding a child or children to the policy.
Your employer's plan must also pay for about 60% of the cost of medical care to meet the ACA's minimum value standard. You would pay the other 40% (or so) of costs.
If your employer does provide an affordable plan option that meets or exceeds the minimum value standard, and you choose not to enroll in it, you will probably not be eligible for a subsidized policy through the federal government's Health Insurance Marketplace.
The Health Insurance Marketplace
Single parents who do not qualify for Medicaid or CHIP may still be eligible to receive a subsidy to help pay for insurance through the Health Insurance Marketplace. Eligibility for the subsidy, also known as a "premium tax credit" (PTC), depends on your having a household income that is between 100% and 400% of the FPL.
You may use the PTC to lower the amount of the premium you have to pay each month. If you don’t use the full amount of the credit to offset your premiums, you may be able to claim the rest of the credit when you file your federal income taxes for the year.
The amount of your PTC is based on your estimated income for the year. If your actual income is higher than your estimate, you will have to pay to the federal government the difference between the larger PTC you thought you would be eligible for and the smaller, actual amount you were eligible for based on your higher income.
Short-Term Health Insurance
If you are a single parent between jobs and waiting for insurance coverage to begin at your new place of employment, you may wish to buy a short-term medical insurance policy. This short-term policy can provide limited benefits until your new coverage begins.
Short-term insurance lasts for only one month or a few months and always less than one year. The insurer can turn you down if you have a pre-existing condition and will probably not renew your policy for another term if you get sick or become pregnant.
Some states forbid insurance companies from issuing short-term policies because they don't cover pre-existing conditions. Other states have effectively prohibited short-term policies by setting strict rules about their issuance.
Your Parent’s Health Insurance Plan
Under the ACA, you are allowed to stay on your parent’s health insurance plan until you are 26 in most cases. That includes young adults who have a child or who have started or left college.
You do not have to be claimed as a dependent on your parent’s taxes or to live with your parent to be on their health insurance.
You may be included on your parent's plan even if you have chosen not to enroll in your employer's health plan.
Your parent generally can include you on their employer-sponsored insurance only during an open enrollment or special enrollment period. If your parent is buying a plan through the Health Insurance Marketplace, they can include you on the application.
Rules regarding obtaining health insurance through a parent's plan may vary based on the state in which you live and the individual plan.
The Bottom Line
With a little research, you should be able to obtain a health insurance plan that works for you and your children. For help in finding plans that you would qualify to buy or receive, you can create an account online at HealthCare.gov, a website of the U.S. Centers for Medicare & Medicaid Services.