The Affordable Care Act (ACA), which is often referred to as Obamacare was available to the public in 2013 and had the goal to help all Americans regardless of income level be able to afford quality healthcare. This was done primarily by implementing a new law that subsidizes individuals and families to help them pay for their health insurance. In this blog, we will go over who qualifies for Obamacare health insurance subsidies and why this makes health insurance now affordable for millions of Americans.
To qualify for Obamacare subsidies, the health insurance that you enroll in must be a plan that is available on the ACA marketplace. If you enroll through your job or on a separate private plan, then you are not eligible for the subsidies. If your health insurance through your job is considered too expensive based on the ACA law, then you may be able to qualify for the subsidies on the ACA marketplace. The law states that if your health insurance through your employer is more than 9.5% of your income then you may be able to take advantage of the subsidies on the ACA marketplace.
The next requirement to qualify for subsidies is that your household income must be within a specific income range. This range is based on the federal poverty level (FPL) and falls between 100% to 400% FPL. For 2022, for a single individual it is $13,590 and for a family with four people is $27,750. These numbers are just the minimums, you can still qualify even with an income that is much higher than this in some cases. There are some scenarios where a family earns $90,000 and still qualifies for subsidies based on many factors.
The actual subsidy amount that you qualify for is based on many factors that include income level, number of household members, and benchmark cost of ACA health insurance in your county. This benchmark plan is going to be the second lowest cost silver plan that is available in your specific county of residence. The subsidy is based on income with lower income receiving higher subsidies but even some mid-level income receiving a lower amount of subsidy.
An example of this would be if a family of four household has an income of $28,000 per year, they would receive a higher subsidy amount to reduce their health insurance cost verses a family of four that earns $75,000 per year. Basically the lower the amount is the more subsidies you will get as long as you are in the minimum income range. As mentioned earlier regardless of income you must enroll in a ACA marketplace plan in order to take advantage of the subsidies.
Subsidies are the biggest part that makes healthcare affordable with Obamacare plans. Another important part of Obamacare is the opportunity to qualify for a plan that has cost sharing reductions (CSR). To qualify for a CSR your household income must be below 250% of the FPL. A certified and Licensed health insurance agent can help you to see if you qualify. If you qualify for a CSR, you can enroll in a silver cost sharing plan which is often nicknamed the platinum plan of Obamacare. This is because you will have a very low deductible, out of pocket maximum and an overall very low-cost affordable plan.
You have to be a U.S. citizen or a legal resident to take advantage of the Obamacare subsides. If you do not have legal immigration status, then you will not qualify for this governmental program.
Subsides are based on the income year that you are enrolling and are not considered to be permanent. Subsidies amount can be different each year if your income, household, or other factors change. You want to make sure that each open enrollment period starting November 1st and ending December 15th you update your income to make sure you receive the correct subsidy amount. For all your insurance needs visit us at MyChoiceHealthInsurance.