Affordable Care: Small biz owner, family of six

We’re a small business, just my husband and me, and have been on Dirigo since the beginning. We have four children at home: two 12-year olds, a 10-year-old, and an 8-year-old.  Dirigo allowed us to keep decent health insurance for our family and we are very grateful. 

Now, from everything I’ve seen, we’re about to lose our health insurance because 1) Dirigo is gone; 2) we won’t be able to show enough profit (income) for subsidies. We’ve been working hard to keep our family business, with the goal of growing enough to not only support our family but employees as well. Buying without subsidies through the small business exchange for our family of six is impossible.  We simply can’t afford it, nor can many others I should think. I have to believe we’re not the only small family business in this position, especially not in this economy, not after the way things have been these past years. What options, if any, do we have? 

Living and Loving It in Rural Maine

Dear Living and Loving It in Rural Maine,

Your family, like many others, is falling into the gap between subsidies and Medicaid.  In states that are not expanding Medicaid (Maine is one of them), people earning less than 133% of Federal Poverty cannot get subsidies and do not get Medicaid.  This is true for adults, but not for children.

Your first step should be to apply for MaineCare for the four children.  There is no asset test to enroll children in MaineCare; they will qualify solely based upon your income.

If your earnings are less than $31,590 (100% of Federal Poverty for a family of six), then you and your husband would also qualify for MaineCare.  Starting in 2014, there will be no asset test for people who qualify as parents for Medicaid.

If your earnings are higher than 100% of Federal Poverty, then you and your husband need other options.  One strategy is to buy a high deductible or an indemnity plan before the end of 2013.  Many of these plans are going away in 2014, but if you buy them in 2013, you can be covered for most of 2014 and not pay a penalty for being uninsured.  You can go to your local hospital and apply for free or discounted outpatient care.   (See also Consumers for Affordable HealthCare’s Guide to Health Care in Maine for more information about free and discounted sources of care.)   If you did have an inpatient stay, you can apply at that time for the hospital’s charity care program.  Thus, even if you could not afford to pay the high deductible, you might be able to put together some charity care with your insurance to make ends meet.

Once your income reaches $42,015, (133% of Federal Poverty for a family of six) you will qualify for subsidies to purchase coverage for the two of you.  With the subsidies, coverage for a six-person family at 133% of Federal Poverty would cost two percent of income or $840 per year.  The children would continue to qualify for MaineCare, even if you and your husband bought private coverage.

You have an interesting opportunity, as the owner of your business.  You have some control over what you take from the business as income and what you reinvest.  An accountant or financial planner could help you make the most of your resources – earning income, investing in the business, purchasing health insurance.  I’m confident that there are perfectly legal ways to approach this and, in the end, maximize your financial and health assets.

Updated 10/9/2013: Added information about parents’ Medicaid option.

Linda Riddell

About Linda Riddell

A published author and health policy analyst with 25 years’ experience, Linda Riddell's goal is to alleviate the widespread ailment of not knowing what your health plan can do for you.