Individuals and families whose household income falls between 100-400% of the federal poverty level may qualify for Obamacare health insurance subsidies, which help lower premium costs and out-of-pocket expenses.
To determine how much you might save with Marketplace plans, estimate your household’s expected 2023 income and check if you are eligible for Medicaid or CHIP eligibility.
1. Individuals
The Affordable Care Act allows individuals to reduce marketplace premiums by estimating their household income and applying a subsidy accordingly. Subsidies are calculated based on anticipated earnings during coverage year; if actual earnings fall short of your estimate, further savings could be available.
Consumers with limited incomes may qualify for additional savings on out-of-pocket health care costs like deductibles and copays through cost sharing reductions, which offer extra discounts of up to 250% of poverty level income.
Individuals without access to affordable employer-sponsored group health insurance may be eligible to enroll in the Marketplace during its open enrollment period (OEP), running from November 1 through January 15 in most states. Outside this window, some Americans may obtain short-term health plans not regulated by the Affordable Care Act (ACA).
2. Families
Millions of individuals can qualify for subsidies that help significantly lower marketplace plan costs. Income-based premium tax credits are available to households earning up to 400% of the federal poverty level; and by 2023 new rules will ensure that most individuals between 100% and 400% will not pay more than 8.5% of their household income for a benchmark Silver plan on an exchange.
Subsidies are only available through the marketplace during open enrollment, which runs from November 1 to January 15. You may still enroll if you experience a qualifying life event outside this period.
3. Employers
The Affordable Care Act makes it illegal for insurance companies to exclude individuals with preexisting conditions from coverage or charge them higher premiums, which includes both employer-sponsored group health plans and those purchasing individual coverage through marketplaces.
Most individuals can qualify for Obamacare marketplace subsidies based on income and household size, designed to assist with paying for the second least expensive plan in their region on exchange. Under the American Rescue Plan’s premium subsidy enhancements that will continue through 2025.
As a rule, an Obamacare subsidy can be claimed if one’s income falls within 400% of the federal poverty level; however, other forms of qualifying may also exist, including becoming eligible for an SEP or experiencing an eligible life event.
4. Individuals with pre-existing conditions
The Affordable Care Act or Obamacare provides a safety net option for individuals without access to affordable employer-sponsored group health coverage, Medicare or Medicaid. Individuals earning between 100% and 400% of the federal poverty level can receive premium subsidies to offset marketplace plan costs.
Consumers eligible for subsidies pay an 8.5 percent of household income maximum cost for benchmark silver plans, subject to subsidies. It is important for individuals who experience changes in income during the year that could impact eligibility for Obamacare subsidies; to avoid losing financial assistance it’s best to enroll during November 1-January 31 open enrollment period; those experiencing certain life events, like marriage or loss of employment may qualify for special enrollment period (SEP) outside this window.
5. Individuals with a disability
The Affordable Care Act, more commonly known by its acronym Obamacare, offers those with limited income access to financial assistance that reduces health insurance premiums. If your income falls within 100% to 400% of the federal poverty threshold (this figure changes every year depending on inflation), an ACA subsidy could potentially help cover your health insurance costs.
Subsidies come in the form of advance premium tax credits and cost-sharing reductions; these discounts help offset out-of-pocket expenses such as deductibles, copayments and coinsurance premiums. Your eligibility for premium subsidies typically is determined by selecting the second lowest-cost silver plan available in your area; in certain circumstances it could even be applied towards an entirely free plan if income levels drop significantly; KFF offers a free calculator to estimate your subsidy.
