The role of Obamacare subsidies is very important: to help low- and moderate-income families to reduce the cost of health insurance. The federal government provides two affordability programs Premium Tax Credit and Cost-Sharing Reductions. Both of them are available only through the Health Marketplace (Exchange) when you enroll in one of the metal level plans. The Obamacare Subsidy Calculator allows you to estimate health insurance premiums and subsidies when you are purchasing insurance in Health Exchanges. It is very helpful to have an estimation of your subsidies. It will determine whether you should apply for health insurance on the Exchange, or directly through insurance vendors where you may find more plan choices.
This post describes probably the best known subsidy calculator – Obamacare Subsidy Calculator from Kaiser Family Foundation. We use an example of a family of 4 (2 adults and 2 children) with household income 229% of FPL.
Kaiser Obamacare Subsidy Calculator – Input
1. Select a State:
Enter your zip code:
2. Enter income as:
3. Enter annual income (dollars):
4. Is employer coverage available?
5. Number of people in family:
6. Which members of your family are enrolling in exchange coverage?
7. Number of adults (21 and older) enrolling in exchange coverage:
8. Number of children (20 and younger) enrolling in exchange coverage:
How many Children use Tobacco?
Kaiser Obamacare Subsidy Calculator – Report
The information below is about subsidized exchange coverage. Note that subsidies are only available for people purchasing coverage on their own in the exchange (not through an employer). Depending on your state’s eligibility criteria, you or some members of your family may qualify for Medicaid.
Household income in 2014:
229% of poverty level
Maximum % of income you have to pay for the premium, if eligible for a subsidy:
Health Insurance premium in 2014 (for a silver plan, before tax credit):
$10,761 per year
You could receive a government tax credit subsidy of up to:
$6,805 per year
(which covers 63% of the overall premium)
Amount you pay for the premium:
$3,956 per year
(which equals 7.33% of your household income and covers 37% of the overall premium)
Children under the age of 19 at this income level are likely eligible for coverage under the Children’s Health Insurance Program (CHIP) or Medicaid. If your children are eligible for one of these programs, they would not be eligible for subsidized exchange coverage and should instead enroll in CHIP or Medicaid. To get the most accurate estimate for your family’s tax credit and premium amounts, you should not include children who are eligible for CHIP or Medicaid in the number of children enrolling in exchange coverage. For more information on CHIP eligibility, see the FAQ.
Other Levels of Coverage
The premium and subsidy amounts above are based on a Silver plan. You have the option to apply the subsidy toward the purchase of other levels of coverage, such as a Gold plan (which would be more comprehensive) or a Bronze plan (which would be less comprehensive).
For example, you could enroll in a Bronze plan for about $1,715 per year (which is 3.18% of your household income, after taking into account $6,805 in subsidies). For most people, the Bronze plan represents the minimum level of coverage required under health reform. Although you would pay less in premiums by enrolling in a Bronze plan, you will face higher out-of-pocket costs than if you enrolled in a Silver plan.
Out of Pocket Costs
Your out-of-pocket maximum for a Silver plan (not including the premium) can be no more than $10,400. Whether you reach this maximum level will depend on the amount of health care services you use. Currently, about one in four people use no health care services in any given year.
You are guaranteed access to a Silver plan with an actuarial value of 73%. This means that for all enrollees in a typical population, the plan will pay for 73% of expenses in total for covered benefits, with enrollees responsible for the rest. If you choose to enroll in a Bronze plan, the actuarial value will be 60%, meaning your out-of-pocket costs when you use services will likely be higher. Regardless of which level of coverage you choose, deductibles and copayments will vary from plan to plan, and out-of-pocket costs will depend on your health care expenses. Preventive services will be covered with no cost sharing required.
Other Coverage Options
Children and young adults under age 30 are eligible to purchase catastrophic coverage. With a catastrophic plan, you would pay out-of-pocket for most health services until you reach the annual limit on cost sharing ($12,700 in 2014). However, preventive services are covered with no cost sharing required.
Need Help with Interpreting Your Obamacare Subsidies?
If you need assistance with eligibility determination for enrollment in a Qualified Health Plans (QHP) and for an interpretation of subsidy calculation results (Medicaid, CHIP, premium tax credit, and cost-sharing reductions) please contact Liberty Medicare or call us at 877-657-7477. All of our services are offered to you at no cost.
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For help finding the best Medicare or Individual Health Plan for you, please contact Liberty Medicare or call us at 877-657-7477.