Government Assistance Programs

Source: USA.gov.

Healthcare

Six major government healthcare programs provide medical coverage for low-income and older Americans, children, veterans, and those who have recently lost their jobs.

Medicare

Medicare is the main health insurance plan for those 65 and older. If you are still working and covered by employer health insurance when you are three months away from your 65th birthday, discuss your Medicare options and requirements with your human resources office. You can also consult “How To Apply Online for Just Medicare” on the Social Security website.

Medicare Part A pays for inpatient hospital stays and nursing care. Medicare Part B covers doctor’s visits, tests, flu shots, physical therapy, and chemotherapy. Medicare Part D is Medicare’s prescription drug benefit program, which is an optional benefit administered by private insurance companies.

Most people usually don’t pay a monthly premium for Part A, and there are no coinsurance costs for hospital stays of 60 days or less. Part A is paid for through taxes during an individual’s working years so that they receive the benefits in retirement.

The tax rate for Medicare is 1.45%. Employers also pay a tax of 1.45% for their employees, making the total Medicare tax 2.9%. If individuals earn over $200,000, they pay an additional 0.9%. This is only levied on employees, not employers.

Part B and Part D are paid for by premiums that the participant pays for out-of-pocket. Medicare is paid by two trust funds, the Hospital Insurance Trust Fund, which funds Part A, which is funded through the payroll taxes described above, and the Supplemental Medical Insurance Trust Fund, which funds Part B and Part D, which is funded by premiums and other income, such as interest on the invested funds.

The trust funds don’t cover the whole cost of healthcare for Medicare recipients, so there are still some monthly premiums, deductibles, copays, and coinsurance.

ACA Health Insurance Marketplace

Healthcare.gov is home to the Health Insurance Marketplace, created by the Affordable Care Act (ACA), an Obama administration program designed to provide affordable health insurance to uninsured Americans. Anyone who doesn’t have health insurance can obtain coverage through the Marketplace. Those who fall below certain income limits can receive subsidies that lower the cost of coverage.

The Marketplace normally has an annual enrollment period to obtain or change coverage. In 2022, open enrollment begins November 1 and runs through the end of the year.

Medicaid and CHIP

Medicaid and the Children’s Health Insurance Program (CHIP) are related but have slightly different requirements. Medicaid is for low-income families and individuals. CHIP is for dependents under age 19 whose parents earn too much to qualify for Medicaid but not enough to pay for private health insurance coverage.

Both programs are federally funded in part and run at the state level. Each state has its own rules but must follow federal guidelines. You can apply for Medicaid and CHIP through the ACA Health Insurance Marketplace or your state Medicaid agency.

Veterans Administration Healthcare

The primary criteria to receive VA healthcare benefits require that you be a military veteran or former member of the National Guard or Reserve who served on active duty and was not dishonorably discharged. Specific eligibility depends on when you served and for how long. The rules are complicated but well explained on the VA’s eligibility web page.

COBRA

Coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA) is mandated by federal law for employees (and their dependents) when they lose their job or experience a reduction in work hours. One huge downside to COBRA coverage is the cost. When you lose your job, whatever your employer paid for your health insurance goes away, and you have to pay the entire amount.

Pros of Government Healthcare Programs

• Improve public health
• Stop medical bankruptcies for vulnerable populations
• Boost the economy due to savings
• Human rights issue

Cons of Government Healthcare Programs

• Increases government debt
• Potential for abuse
• Reduces competition
• Long wait times for service

State Health Department Programs

State health departments offer programs in addition to those available at the federal level. Use the USA.gov state health departments link to find out what is offered in your state, information about eligibility requirements, and how to apply.

Retirement

The primary government retirement programs are Social Security for most citizens 65 and over who qualify through their work history and the Federal Employee Retirement System (FERS) for certain government employees who are not covered by Social Security.

Social Security

Most people are familiar with Social Security and the fact that you apply for benefits at a certain age depending on when you were born and whether you want to receive partial or full benefits. You can apply for benefits for yourself or as a spouse if you meet the following four requirements:

• You are at least 61 years and 9 months old.
• You are not currently receiving Social Security on your work record.
• You have not already applied for benefits.
• You want benefits to start no more than four months in the future.

You can also apply for Medicare when you apply for Social Security if you are within three months of age 65.

Federal Employees Retirement System (FERS)

FERS, which replaced the Civil Service Retirement System (CSRS) in 1987, provides benefits to civilian government workers through three programs: a Basic Benefit Plan, Social Security, and the Thrift Savings Plan (TSP).

Eligibility for FERS benefits is determined by your age and number of years of service. The CSRS and FERS planning and applying websites provide complete information depending on how close you are to retirement.

Taxes

The Internal Revenue Service (IRS) sponsors several tax-assistance programs to make federal and—in some cases—state tax filing easier and free.

Free File

If your adjusted gross income (AGI) is $73,000 or below, you can file federal, and in many cases, state returns, online at no cost. The process and what you need to have to file are all explained in this Free File infographic. Get help choosing a product using the Free File Online Lookup Tool.

With income above $73,000, you can still use the Free File Fillable Forms tool to prepare your taxes as long as you are comfortable doing your taxes and don’t require assistance. The fillable forms tool lets you file electronically but does not include state forms.

VITA and TCE Tax Filing Assistance Programs

The IRS has two in-person tax assistance programs: the Volunteer Income Tax Assistance (VITA) program and the Tax Counseling for the Elderly (TCE). Both offer free tax-preparation assistance to qualified individuals. VITA generally applies to you if your income is $58,000 or less, you are disabled, or you have limited English-speaking skills. TCE is for citizens aged 60 or older.

You can find VITA and TCE program sites using either the IRS TCE/VITA locator tool or the AARP Foundation Tax-Aide site locator tool.

Financial Assistance for Small Businesses

Small businesses are the beneficiaries of several long-standing government assistance loan programs, most of them originating from the Small Business Administration (SBA).

U.S. Department of Agriculture (USDA)

The USDA offers several programs aimed at all sectors of the agricultural community. Programs include farm loans, housing assistance, loans and grants for rural economic development, loans for beginning farmers and ranchers, livestock insurance, and more. Detailed information on all USDA programs, including how to apply, can be found on the USDA Grants and Loans program web page.

Small Business Lending Fund

The Small Business Lending Fund (SMLF), created as part of the Small Business Jobs Act of 2010, is a dedicated fund that provides capital to community banks and community development loan funds (CDLFs) to encourage those organizations to lend to small businesses. Information about this fund, including the location of lending institutions near you, can be found on the U.S. Treasury Small Business Lending Fund website.

Pros of Government Business Programs

• Lower interest rates
• Favorable repayment terms
• Less collateral needed
• Low or no down payments

Cons of Government Business Programs

• The loan amount may be small
• Long approval process
• Personal guarantees are often required

Watch Out for Scams

People looking for government assistance sometimes come across ads for free government grants; however, the government does not award grants to individuals, only to states, universities, and other organizations. Anyone who suggests otherwise is probably running a scam. If you receive such an offer, the Federal Trade Commission (FTC) suggests the following dos and don’ts:

• Write down the phone number.
• Register at the National Do Not Call Registry.
• File a complaint with the FTC.
• Don’t give out bank account information.
• Don’t pay out any money.
• Don’t believe a caller or an email just because it claims to be from the government.

The Bottom Line

There are many government assistance programs available to individuals and businesses. If you feel you need assistance, spend time researching what is available and if you qualify. Many of these programs will be able to ease people’s financial burdens.