Health Insurance Subsidies Explained
By applying through the health insurance marketplace, you may qualify for Advanced Premium Tax Credits (APTC). These can be premium subsidies and/or cost subsidies depending on where your annual household income and family size fall on the Federal Poverty Level (FPL). The chart below is based on the annual income for subsidies. These are 2016 incomes.
To use the above chart to determine if you may be eligible for payment assistance, count the number of individuals in your taxable household, then calculate your total taxable income for the household.
- Under 400% of poverty level, then you may be eligible for premium subsidies.
- Under 250% of poverty level, then you may be eligible for premium subsidies AND cost subsidies.
- Under 138% of poverty level, then you may be eligible for Medicaid. Medicaid is free health care.
States vary on whether or not they have expanded Medicaid. Since it is a state based program, they vary on what they provide if you are eligible for Medicaid. Currently in Kentucky (2016), the entire Medicaid program is undergoing an overhaul. We are continually informed as to the changes that are taking place as they happen.
Understanding the Subsidies
Premium subsidies are money paid by the government directly to your insurance carrier and they reduce your monthly premium by a certain amount. Your subsidy amount depends on your household size and income. These are available for people up to 400% of FPL.
Cost subsidies lower deductibles and copays of your plan. For example, a plan without cost subsidies may have a $2,500 deductible. If you are eligible for cost subsidies, your deductible may be lowered to $750 on the same plan. The copay you pay at the doctor may be less as well. These are available for people up to 250% of FPL.
Entering your information into the health insurance marketplace to determine if you are eligible is how you receive the subsidies. You must file taxes to be eligible for any subsidies. Where we find many of the issues is if you are self-employed or if you own your own business. Ensuring you enter the information correctly when signing up can really affect what your premium will be.
We are experts in this health insurance subsidies and the health insurance marketplace. Once you have created your account, we can help you enter the information to ensure you are doing it properly to maximize your savings. We can also help you pick the plan that is the best fit for your needs.