To help visualize how the tax credits for health insurance premiums work in the new Marketplace, I prepared this handy chart.
Individuals and families who cannot get qualified, affordable health insurance through their employer or through an existing government program like Medicaid, Medicare, VA or Tricare, should look up their household size and closest estimated 2014 annual income in Table 1. Use the household size and modified adjusted gross income (MAGI) from your last tax return to get a ballpark. For a definition of MAGI, go here: http://laborcenter.berkeley.edu/...
If your income is below 138% of federal poverty level — that includes individuals with incomes currently up to about $15,800 and families of four with incomes up to about $32,500 — AND you live in one of the 25 states or D.C. taking the Medicaid expansion, then you will be eligible for Medicaid and have no premiums and very little out-of-pocket costs. Childless adults will be eligible, as well.
For higher incomes, follow the column down to Table 2 to find the approximate MAXIMUM monthly premium you pay for the benchmark Silver plan on the exchange (this is the max — you could actually pay less). The federal govt pays any balance due on that premium. In other words, the tax credit is what’s leftover after you pay your maximum. And the federal govt may also help with out-of-pocket costs like deductibles, coinsurance and co-pays if you are below 250% of federal poverty level.
Note: We’ll discuss what “benchmark Silver plan” means in the next diary post.
Let’s do an example on the premium tax credits. Take a single person making about $23,000 or 200% of FPL. The max she (or he) would pay for the benchmark Silver plan is $121/month — no matter where she lives or how old she is. If she’s 25 years old, that plan may actually cost $200. The federal govt would pay the other $79 to the insurance company she chooses on the exchange. The tax credits are refundable and advanceable so you do not need to wait until tax filing time — the federal govt pays them each month directly to the insurance company you choose.
If she’s 45 years old, that plan may actually cost $300. The federal govt would pay the other $179 to the insurance company. And if she’s 60 years old, that plan may actually cost $600. The federal govt would pay the other $479. You can see that the tax credits are more generous the older you are because while the premium may cost more, your max contribution stays the same.
You can find a handy PDF flyer of this chart, here:
http://www.connectthedotsusa.com/... (go to page 2)
And a JPG flyer here:
http://www.connectthedotsusa.com/...
If you are having trouble logging in at http://www.healthcare.gov/ because of all the traffic, you can get an estimate of your premium and tax subsidy at this handy calculator: http://kff.org/...
Unfortunately, the ACA drafters did not anticipate the Supreme Court ruling that states could opt out of the Medicaid expansion so no tax credit provisions were included for folks below 100% of federal poverty level. They were supposed to get Medicaid instead. Now they are just doubly screwed. On the bright side, thank goodness the tax credits at least went as low as 100% of FPL instead of just 138% of FPL.
My best advice would be to move to the closest state taking the Medicaid expansion (see map above) until your state caves like a cheap tent to get all that federal money or until Democrats can take back the House in D.C. and get you tax credits at least as generous as someone making a little bit more money.