Can You Use ACA Subsidies for Catastrophic Health Plans in South Carolina? Here’s the Truth

ACA subsidies do not apply to catastrophic health plans in South Carolina. Learn why, what to watch for, and how to find savings on eligible Marketplace plans.

In this episode

• Why ACA subsidies don’t apply to catastrophic health plans in South Carolina
• How to estimate your income and household for Marketplace savings
• Tips for finding the right health plan to maximize your subsidy

Source: Saving money on health insurance (healthcare.gov)

Billy Jordan is a licensed insurance agent (NPN 8699876) with The Jordan Insurance Agency, based in Charlotte, North Carolina. Voices in this episode are AI-generated, including Billy's, from a script reviewed and approved by Billy Jordan, a licensed insurance agent. General education only, not advice for your specific situation.

Tanya (AI host): Can South Carolina residents use ACA subsidies for catastrophic health coverage? Stick around, because the answer isn’t as simple as you might think.

Tanya (AI host): Welcome to Smart Coverage. Real Advice., the insurance podcast from The Jordan Insurance Agency. I'm Tanya, your host, and I'm here with Billy Jordan, a licensed insurance agent and the president of The Jordan Insurance Agency.

Billy Jordan: Glad to be here, Tanya. That’s a great question, and it’s one we hear a lot—especially from folks trying to keep their monthly costs down. Let’s break down what healthcare.gov actually says about catastrophic health plans and Marketplace subsidies.

Tanya (AI host): So, let’s get right to it. If I’m in South Carolina and I want one of those catastrophic plans, can I use ACA subsidies to help pay for it?

Billy Jordan: According to healthcare.gov, you can’t use ACA subsidies on catastrophic health plans. Those subsidies are only available for certain Marketplace plans. Catastrophic plans are a separate category, and subsidies do not apply to them.

Tanya (AI host): Wait, so even if I qualify for a subsidy based on my income, I can’t use it for a catastrophic plan at all?

Billy Jordan: That’s right. Even if your income is low enough to qualify for a subsidy, those savings won’t work on catastrophic coverage. Catastrophic plans are a separate category, and the full premium is your responsibility—there’s no financial help from the Marketplace for those plans.

Tanya (AI host): Why is that? What’s so different about catastrophic plans compared to the regular Marketplace plans?

Billy Jordan: Catastrophic plans have lower monthly premiums, but much higher deductibles and out-of-pocket costs. They’re meant as a last-resort safety net, not as comprehensive coverage. Subsidies only apply to certain Marketplace plans that meet specific requirements. So if you want help paying your premium, you’ll need to look at those Marketplace plans that are eligible for subsidies.

Tanya (AI host): Can you give me an example? Maybe, how this plays out for someone in South Carolina?

Billy Jordan: Sure. Let’s say you’re twenty-eight, living in South Carolina, and you’re shopping on the Marketplace. You check your income and find out you qualify for a subsidy. If you pick a Marketplace plan that is eligible for subsidies, that subsidy will reduce your monthly premium. But if you choose a catastrophic plan, you’ll pay the full amount—no subsidy applies, no matter what your income is.

Tanya (AI host): What’s a common mistake you see people make here?

Billy Jordan: A lot of folks see that lower monthly price on a catastrophic plan and think, “Great, I’ll just use my subsidy here and save even more.” But the system doesn’t work that way. It’s important to know up front that subsidies and catastrophic plans don’t mix.

Tanya (AI host): So, if someone’s really trying to save money, what should they do instead?

Billy Jordan: The best move is to fill out a Marketplace application, like healthcare.gov suggests, and see what you qualify for. The site will show you exactly how much you could save on a Marketplace plan that is eligible for subsidies. It’s all about checking the numbers for your own situation.

Tanya (AI host): According to healthcare.gov, you need to estimate your household’s income for the year you want coverage, not last year. Why does that matter?

Billy Jordan: That’s a good point. Your savings are based on what you expect to make in the coming year, so if you’ve had a job change, a raise, or anything else that affects your income, you need to update that on your application. If you guess too low or too high, you could end up with the wrong subsidy amount.

Tanya (AI host): And who counts in your household when you’re applying for these subsidies?

Billy Jordan: You’ll want to include yourself, your spouse if you’re married, and anyone you’ll claim as a tax dependent—even if they don’t need coverage. That’s important because your household size affects your income calculation and your eligibility for savings.

Tanya (AI host): Is there anything else people in South Carolina should know about trying to use subsidies for catastrophic plans?

Billy Jordan: Just remember, if you’re looking for government help to pay your premium, focus on those Marketplace plans that are eligible for subsidies. Catastrophic plans might look tempting, but subsidies do not apply to them.

Tanya (AI host): Three things to remember. One, ACA subsidies don’t apply to catastrophic plans—only to certain Marketplace plans. Two, always estimate your household income for the year you want coverage, not last year. Three, include everyone you’ll claim as a tax dependent when you apply.

Tanya (AI host): For a personalized look at your situation, book a free thirty-minute chat with Billy and his team at thejordaninsuranceagency.com/podcast.

Billy Jordan: I'm Billy Jordan with The Jordan Insurance Agency. Until next time, take care.

Tanya (AI host): Thanks for listening to Smart Coverage. Real Advice. from The Jordan Insurance Agency.