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The federal minimum wage is $7.25 per hour, which translates to about $15,000 a year if you work full-time. It also means you qualify for Medicaid.
Before the Affordable Care Act (ACA), Medicaid was only for the indigent, the elderly, disabled people, children or pregnant women who couldn't afford health insurance.
Now, workers in lower-income brackets also qualify for coverage if their income falls at or below these ranges:
- $15,856 for a single person
- $21,404 for a family of two
- $26,951 for a family of three
- $32,499 for a family of four
Is the exchange for me? Not unless you want to make things complicated. The expanded Medicaid program gives you what the ACA defines as the Minimum Essential Benefits: emergency care, hospitalization, maternity and newborn care, mental health and substance abuse services, prescription drugs, lab services and preventive care. Any plan available through the exchange must have the same benefits, though it can offer more.
If for some reason you don't want Medicaid, you can shop the exchange to find out the tax credit you’ll get to help pay for insurance. But you will pay an out-of-pocket premium. You can use a tax credit as a deduction from your monthly insurance premium or as an annual deduction at tax time.
What else do I need to know? Not all 50 states agreed to expand Medicaid -- 22 have not expanded the program and three more are still up in the air. In 2012 the Supreme Court ruled that states could opt-out of expanding their Medicaid programs in response to a case that challenged the ACA, also known as Obamacare. If your state opted out and you fall within the income guidelines that would qualify you for Medicaid in other states, you won’t be penalized for not having insurance. Use the tool below to find out if your state has expanded Medicaid coverage.
What if I don’t buy coverage? You’ll pay a tax penalty of either 1 percent of your income or $95 per adult and $47.50 per child for the year, whichever is higher. In 2016, the penalty increases to 2.5 percent of income or $695, whichever is higher. Plus, anyone without health insurance will have to pay the full cost of medical care should they need it. You won’t have to pay a penalty for not having insurance if you fall into one of these categories
- You qualify for Medicaid but your state didn't expand the program
- Your state’s health exchange doesn't have a plan you can afford (costs less than 8 percent of earnings)
- You spent less than three months without coverage
- You’re a member of a recognized religious group with objections to insurance and government programs, including Social Security and Medicare
For more on who is exempt visit Healthcare.gov
Now, use our tool to figure out how much a new health insurance plan will cost plus learn about important dates and coverage in your state.
Sources: The Kaiser Family Foundation, the U.S. Small Business Administration, Centers for Medicare and Medicaid Services, the U.S. Internal Revenue Service, the Health Insurance Marketplace, U.S. Census Bureau and the UC Berkeley Labor Center.