I have a daughter who is 27 – She lives in Miami where she works and is also trying to finish her bachelor’s degree. She only makes $10/hr and has medical insurance through her employer. However, even though it is through her employer, she could only afford a plan that has a deductible of $2,500 and maximum out of pocket of $4,500.

She has to have thyroid surgery and is terrified at the thought of piling medical bills because of this surgery. I have tried to find information to see if she would qualify for some type of subsidy, and if so, where can she go to ask for it?

I will appreciate any information that you can provide.


Answer

Someone with access to affordable employer-sponsored coverage can't get Marketplace cost assistance, the employer's contribution to their health costs is the subsidy.

If her coverage cost more than 9.56% of her household income after deductions she can deny employer coverage and use the Marketplace.

Many times local charities will help with medical bills too.

As expensive as $4,500 can be, especially at $10 an hour, it's better than owing the full out-of-pocket amount. If medical bills get too high, she may be able to look into Medicaid options as well.

She can also deduct medical expenses from here taxes, which may help for qualifying for subsidies moving forward:

The IRS allows you to deduct qualified medical expenses that exceed 10% of your adjusted gross income for the year. Your adjusted gross income (AGI) is your taxable income minus any adjustments to income such as deductions, contributions to a traditional IRA and student loan interest.

If you elect to itemize, you must use IRS Form 1040 to file your taxes and attach Schedule A.

  • On Schedule A, report the total medical expenses you paid during the year on line 1 and your adjusted gross income (from line 38 of your Form 1040) on line 2.
  • Enter 10% of your adjusted gross income on line 3.
  • Enter the difference between your expenses and 10% of your adjusted gross income on line 4.
  • The resulting amount on line 4 will be subtracted from your adjusted gross income to reduce your taxable income for the year.
  • If this amount, plus any other standard deductions you claim, is less than your standard deduction, you should not itemize.

Learn more about claiming medical deductions from TurboTax.

You can also see our guide to how to take medical and dental deductions here.

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Thank you so much for the information that you provided. It was very helpful.