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I’m a young college student looking to start purchasing health insurance here in the United States this year. I’m aware that open enrollment for 2021 starts tomorrow (November 1, 2020) and fully understand it’s purpose and it’s components. Where I start to become confused is at the income realm of healthcare. I have two questions regarding this,

  1. Hypothetically speaking, why is a man that makes $0.00 yearly not qualified for the same perks and savings that a person making $20,000 yearly is qualified for? I noticed that people making between $12,000 and $40,000 qualify for the most savings and perks in the healthcare marketplace. It you make below $12,000 it says that you might not qualify for any saving or perks at the time. Why is this? You’d think that the people with the lowest level of income or NO source of income would qualify for the HIGHEST levels of saving and perks! This doesn’t seem to be the case though. I’m thinking it might have something to do with laws put in place rearguing the federal poverty level. Please help!

  2. Why are most of the saving and perks associated with “silver” health plans. I notice that in order to qualify for the highest level of savings and insurance that one MUST pick a silver plan. Why are the silver plans the chosen plans for the highest levels of savings? Why they delegate them solely to the silver-plans?

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The original intention was that people below a particular income threshold (138% of the federal poverty line) would all be enrolling in Medicaid (the health insurance program for the poor) rather than buying insurance on the exchanges. One of the cases that went to the Supreme Court ruled that Medicaid expansion couldn't be forced on the states, it was something that each state had to have the option to opt in to. Most states at this point have opted in, so most of those below the income threshold are eligible for Medicaid, but there are some states where there may be people that make too much for Medicaid but not enough to qualify for subsidized insurance on the exchanges (between 100% and 138% of the federal poverty line).

When Congress was figuring out how large the health insurance subsidy should be, they chose to use the cost of the second least expensive silver plan as the benchmark. They could have chosen a more generous subsidy based on the cost of a gold plan or a less expensive subsidy based on the cost of a bronze plan but chose to split the difference. That generally means that if you qualify for a subsidized plan on the exchange, the silver plans will give you decent coverage for a very low price but you can upgrade to a gold plan or downgrade to a bronze plan depending on your needs.

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