By now, I think most of our readers are aware that Colorado is one of the states that expanded Medicaid under the ACA, and that exchange subsidy eligibility begins where Medicaid eligibility ends – there is no overlap. Households with incomes up to 133% of poverty level (actually 138%, because the law has a built-in 5% disregard that is factored in when an applicant completes the Medicaid eligibility forms), are eligible for Medicaid in Colorado. For a family of four in 2014, that’s up to $31,721.
The general rule of thumb in Medicaid expansion states is that exchange subsidies pick up where Medicaid leaves off, providing financial assistance that allows people to purchase private health insurance. But the Colorado Medicaid guidelines are more generous for children. Kids up to 18 are eligible for Medicaid with household income up to 142% of poverty ($33,867 for a family of four). In families with incomes up to 133% of poverty, the whole family is eligible for Medicaid. If household income is between 134% and 142% of poverty, the parents will be eligible for subsidies to purchase insurance in the exchange, while the kids will be eligible for Medicaid rather than exchange subsidies.
Colorado also has a health plan available for children whose families earn more than the Medicaid guidelines allow, but not more than 260% of poverty level. Child Health Plan Plus (CHP+) is available for kids up to age 18 with household incomes that range from 143% of poverty ($34,105 for a family of four) to 260% of poverty ($62,010 for a family of four). CHP+ does have an enrollment fee (ranging from $25 to $105 depending on household income and the number of children being enrolled), and nominal copays, but is certainly less financially burdensome for families than private health insurance.
The exchange subsidies are structured so that there’s no overlap in terms of eligibility. If a child is eligible for Medicaid or CHP+, he is not eligible for subsidies to offset the price of private health insurance through Connect for Health Colorado. This means that for families with incomes that range from 134% of poverty level up to 260% of poverty level, the most cost-efficient insurance strategy will be to use subsidies to pay for private insurance for the adults, while enrolling any kids 18 and under in Medicaid or CHP+ according to the eligibility guidelines.
You’re not required to enroll your children in Medicaid or CHP+. You can opt to purchase individual health insurance for the whole family instead. But know that if your kids qualify for Medicaid or CHP+, you will only receive an exchange subsidy for adults on your health insurance plan – you’ll be paying full retail price for the kids’ coverage if you choose to purchase private insurance for them.
Hopefully this provides some clarification for families wondering why their available exchange subsidy seems a little on a small side. If your income is between 143% and 260% of poverty and you have children, that subsidy is only intended to help offset premiums for adults on your policy. Children on your application qualify for Medicaid or CHP+ instead, which means you don’t need to purchase private coverage for them at all.