THE BLOG
01/14/2015 11:56 am ET Updated Mar 16, 2015

What Are My Alternatives to Affordable Care Act Health Insurance?

This weekly Q&A addresses questions from real patients about health care costs. Have a question you'd like to see answered? Submit it to AskChristina@nerdwallet.com.

Question:

I am diabetic and can't go without health insurance for my supplies and insulin. But I make too much to qualify for Medicaid in my state and not enough to qualify for tax credits under the Affordable Care Act. What are my options? How can I find affordable coverage or reduce my health care costs?

Answer:

Unfortunately, it sounds like you fall into the "coverage gap." Let me explain.

The ability of the Affordable Care Act (ACA) to help lower-income Americans find affordable health care largely depended on the expansion of Medicaid. With many states opting not to expand the qualification standards for Medicaid, millions were left with no solutions, caught, like you, in what's being called the "coverage gap."

The ACA helped people suffering from chronic conditions like diabetes in several ways. The law mandated essential health benefits, or a set of benefits that all insurance plans must cover. These include prescription drug benefits, hospitalization and chronic disease management. Also, the ACA barred insurance companies from denying coverage to individuals due to pre-existing conditions.

But if you are struggling to afford a monthly premium, these perks remain out of reach.

What is the 'coverage gap?'

By expanding qualification requirements for Medicaid, the ACA intended to extend the free, state-sponsored insurance to more lower-income Americans. Those making between 100 percent and 400 percent of the federal poverty level would be eligible for tax credits and cost-sharing subsidies in the ACA marketplace, and those who made less would largely be eligible for Medicaid.

But in 2012, the Supreme Court interpreted the ACA rule for Medicaid expansion as optional, letting states decide whether to participate. Now, in the states like yours, where Medicaid was not expanded, there is a swath of the population that makes too much for Medicaid coverage and not enough for ACA assistance.

As many as 4 million Americans fall into the coverage gap, according to estimates from the Kaiser Family Foundation. These aren't the poorest Americans, as the poorest likely qualify for Medicaid even in states where it wasn't expanded. Instead, they are most likely to be middle-aged working Americans without children.

The bad news

The bottom line is, you may decide health insurance is unaffordable for you. Depending on your income and monthly expenses, freeing up a few hundred dollars each month for a health insurance premium may feel impossible. The coverage gap is a shortcoming of the ACA, and there's no immediate solution in sight.

But for diabetics like you, going without insurance can be risky. The American Diabetes Association estimates the average diabetic incurs $13,700 in medical expenses each year, most of which are attributed to the disease. That's 2.3 times more than the expenses they would face without diabetes.

Not only is diabetes an expensive disease, but people with diabetes also are much more likely to have additional chronic and costly conditions. As a diabetic, you are at a greater risk for heart disease, stroke and depression, for example. Like diabetes, these conditions require ongoing monitoring and medical treatment.

What you can do

Even if you feel your health insurance is unaffordable, you aren't powerless. Here are a few things you can do to minimize your health care expenses and possibly get assistance:

1. Double-check eligibility and available plan premiums

Before you resign yourself to going without insurance, double-check your eligibility for both ACA tax credits and Medicaid. If you're certain that you don't qualify for either, try contacting an insurance agent who sells plans both on the ACA marketplace and off of it. Insurance agents are experts in finding appropriate plans. They may have resources that you are unable to tap on your own, or know of plans that would best fit your situation.

2. Apply for prescription assistance

You may be eligible to receive your insulin, prescription drugs and other diabetic supplies at a discounted rate. All drug manufacturers offer cost assistance programs, each with unique qualification standards. You may be able to get your insulin at a discounted rate, or even free, by searching online for the drug maker's assistance program or asking your doctor for help. BD, the maker of insulin syringes, also offers reduced price syringes to qualifying patients. NeedyMeds offers a complete list of assistance programs specifically for diabetics. The savings may free up cash each month to buy health insurance.

3. Use community resources

Community health centers are a good resource for people on limited incomes. They provide medical care on a sliding fee based on your income. Social service agencies, charities and even your religious organization may have money set aside for congregants with medical needs. The United Way operates a 2-1-1 help line that can direct you to local agencies that may be able to help.

4. Ask for cash discounts

Medical providers often offer discounts for patients who pay with cash. Sometimes they don't tell you this up front, however, so you must ask.

5. Negotiate medical bills

A high medical bill can spell financial disaster, but many people don't realize these bills are negotiable. Making payment arrangements or settling on a lower balance could make these bills manageable. If you're unable to make progress with medical providers, a medical billing advocate may be able to help.

The health insurance mandate

The individual mandate of the ACA says that everyone must have health insurance or face a penalty. For 2015, that penalty is two percent of your household income or $325 per adult, whichever is greater. However, there are exceptions. If the least expensive coverage available to you is more than eight percent of your income, or if you qualify under certain hardship exemptions, you will not be penalized for going uninsured.

You must apply for these exemptions, so take the appropriate steps to avoid the fee.

When you have a chronic health condition, going without insurance can be scary, and even dangerous, as you weigh every health decision against a potentially high price tag. People without insurance are less likely to seek care for all of their health problems, and opting out of medical care when you have diabetes simply isn't an option.

While there are things you can do to reduce your costs and make the situation more manageable, don't sacrifice your health to save a few bucks, as failing to properly manage your diabetes could leave you with much bigger expenses down the road.

Because you have a chronic health condition that needs to be closely monitored, I do not advise that you go without insurance.