Will you Qualify for Obamacare Subsidies?

August 30, 2013

Many Americans will not have to pay the full price for their health insurance next year thanks to Obamacare subsidies. You too may qualify, however this depends on several factors. Thanks to the Obamacare subsidies, which will help millions of Americans pay for their health insurance starting in 2014 by using state-based exchanges, many people who have a low to moderate income will receive a break on their health insurance premiums.

Who is Eligible? 

It is estimated that 48% of U.S. citizens who purchase health insurance today will be eligible for the Obamacare subsidies. Those that qualify will receive on average $5,548, which will cover more than 60% of the cost of their health insurance.

How Do You Qualify?

The maximum income that you can make must be at or lower than 400% of the poverty line to be eligible for the Obamacare subsidies. This means that as an individual you can make up to $45,960 or as a family of four you can make up to $94,200. The lower that your income is, the larger your subsidy will be. For example, if you are making $17,235 a year you will have to pay a maximum of 4% of your income or about $50 a month, while on the other hand if your income is between $34,000 and $46,000, you will have to pay no more than 9.5% of your income, which is about $360 a month.  On the other hand if you are an individual who makes more than $45,960 you will not be eligible for the Obamacare subsidies and will have to pick up the entire tab on your health insurance.

Extra Subsidies

In addition to the standard subsidy if your income is below 250% of poverty line, which is about $29,000 for a single person and $59,000 for a family of four, you will qualify for extra subsidies that will lower your out-of-pocket costs like co-payments and deductibles.

Your State

If you qualify for the Obamacare subsidies, the size of your subsidy will depend largely on where you live. This is because the amount of your subsidy will be based on the cost of the second to lowest silver plan of your area, which works on a sliding scale. For example, in California a man who is 40 years old can buy a silver plan for about $300 a month.  However, if he made less than $17,235 then he would get an Obamacare subsidy of $236 and will only have to pay $57 of his health insurance. If this same man’s income was $28,725 then his subsidy would decrease to $101 and he’d have to hand over $193 for his health insurance. In this case his deductible would be $1,500 and he would have to fork over $40 for every doctors visit. If this man made $45,960 or more then he would have to pay the full cost of his health insurance which would be about $294 a month as he would receive no subsidy. In this case his deductible would be about $2,0000 and he would have to hand over $45 for ever doctors visit.

Conclusion 

Although these subsidies will be helpful for many people who are not making enough of an income to pay for their medical needs, some people still believe that Obamacare is still too expensive. For those that struggle to put groceries on the table and pay the electricity bill even a small premium can seem like too much for them. If you are interested in seeing how much of a subsidy you will receive you can visit the Kaiser website to use their free online calculator.

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