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The Simple Way to Get Low-Cost Health Coverage You Probably Didn’t Know About

Diana Avellanda, a tax preparer based in Maryland, faces a lot of skepticism from her clients when she tells them they may be eligible for low-cost health coverage. Clients often think she’s attempting to sell them something or are just simply incredulous. However, Avellanda is actually helping her clients take advantage of an underused feature of Maryland’s tax forms that provides financial assistance for health insurance.

Avellanda aims to help people avoid the financial risk of a medical emergency and hopes her clients feel the same peace of mind she does with her own health insurance. The process is straightforward: taxpayers just need to check a box on their tax forms, which then triggers a qualifying event, enabling them to enroll in health insurance outside the traditional open enrollment period and access subsidies that can significantly lower their insurance costs if they meet certain income requirements. This also allows the comptroller to share a person’s income information with Maryland’s insurance exchange created by the Affordable Care Act.

Afterwards, taxpayers receive a letter estimating the amount of financial assistance they may qualify for, whether it’s subsidies on an exchange-based plan, Medicaid, or CHIP for their child. A healthcare navigator may also call taxpayers to offer enrollment assistance. Surprisingly, many of Avellanda’s clients who apply end up qualifying for subsidized insurance, despite initially assuming financial assistance was only available to those with very low incomes.

This outreach model is becoming more widespread, with more states, such as Colorado, New Mexico, and Massachusetts, utilizing tax forms to direct people toward lower-cost coverage available through state insurance marketplaces. By next year, at least nine states, including Maine, California, and New Jersey, will have such programs in place. Illinois is also in the process of creating a similar program.

This targeted outreach approach is gaining popularity because it connects the existing infrastructure of taxpayers to find people who may be open to signing up for health insurance but have yet to do so. This is particularly important in the current environment of tremendous churn for health insurance, with people having to reenroll in Medicaid or find new insurance if they make too much money. Additionally, marketplace subsidies created in response to the pandemic have been extended through 2025 via the Inflation Reduction Act.

While these initiatives won’t cover everyone, it’s a step in the right direction to make signing up for health insurance easier and take advantage of federal dollars. According to Coleman Drake, a health policy researcher at the University of Pittsburgh, “Uninsurance in general is extremely costly to society. Whatever we can do here to make signing up for health insurance easy, I think, is an advantage.” In summary, there is low-cost insurance available for consumers, and in some states, getting this coverage is now simpler than many realize.