Financial assistance, also known as subsidies, will be provided to qualified individuals within the health insurance exchanges. The amount of the subsidy will be based on the applicant’s modified adjusted gross income (the total adjusted gross income plus any tax exempt income) as well as the ages of the household members. Subsidies will be provided based on need, with more assistance being provided to lower income families. The amount of the assistance will be based on the premium for the second level of plan within the exchange; the Silver Plan.Financial qualification for a subsidy requires that the consumer falls between 138% and 400% of the Federal Poverty Level. Income falling above this would not qualify for any assistance; those falling below would qualify instead for Medi-Cal or Medicaid.
Federal Poverty Levels 2013 in the Contiguous United States (adjusted annually to reflect inflation):
- Individual – $11,490
- Family of Four – $23,550
There are two types of subsidies available within the health insurance exchange. The first will be in the form of a tax credit, while the other will be “cost sharing assistance”. The latter will assist families in covering their deductibles, coinsurance, and copayments.
How premium and cost sharing is calculated:
- Premium Tax Credit – determines how much the individual/family would have to contribute to the overall premium. This is based on a sliding scale according to income, and cannot exceed 2% of income for individuals less than 133% of the federal poverty level or 9.5% of income for those between 300% and 400% of the FPL
- Cost Sharing Assistance –applies to those enrolling on the Silver Plan. This will further assist qualified individuals with reducing their out of pocket exposure. The discount can be as high as two thirds reduction in out of pocket costs.
Subsidies offer a multitude of benefits. They not only provide financial relief to those wishing to purchase health insurance without breaking their budget, they also serve as a means to encourage enrollment to those who may otherwise go without coverage altogether – especially the younger generations. It is important to not only be aware of the availability of subsidies, but also toobtain the maximum benefit out of them. Let Health Exchange Quote assist you with calculating your subsidy eligibility, as well as enroll in the right plan for your family. Contact us today and our agents will assist you with all of your questions.
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