Could you reduce your monthly health insurance premium or what you pay out of pocket for healthcare expenses covered by your major medical insurance policy?
Premium tax credits and cost-sharing reductions available through the Affordable Care Act (ACA), which is also known as Obamacare, help many Americans lower their health insurance premiums and out-of-pocket costs. However, to take advantage of these subsidies, you must both1:
- Buy your individual major medical health insurance plan from a state-based or federally facilitated exchange, and
- Meet household income guidelines related to the subsidy, or subsidies, for which you apply.
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Obamacare subsidy income limits
Premium tax credits and cost-sharing reductions have different income limits based on the federal poverty level (i.e., poverty guidelines). They are as follows:
- Premium tax credits: 100 – 400% of the federal poverty level3
- Cost-sharing reductions: 100 – 200% of the federal poverty level4
Your health insurance subsidy for the current year is based on the previous year’s federal poverty guidelines. That means 2019 subsidies are based on the 2018 U.S. federal poverty guidelines, which are published in the Federal Register. Current information about poverty thresholds and poverty guidelines may also be found at https://aspe.hhs.gov/poverty-guidelines.
The 2018 poverty guidelines show that $12,140 is the poverty threshold for a one-person household.5 Based on these numbers alone, 100% to 400% of the federal poverty level for a single person would be $12,140 to $48,560. However, this person may or may not be eligible for a premium tax credit.
Other subsidy eligibility factors
You should be aware that your subsidy eligibility may be impacted by the state you live in due to Medicaid expansion decisions and other savings programs available there.6 Furthermore, state benchmark plans (i.e., the second lowest cost silver plan) can also impact subsidy amounts and eligibility.7 You can estimate your premium tax credit using online calculator tools such as the one available through www.healthedeals.com.
Summary + next steps
To verify your final eligibility, you’ll need to apply for health insurance coverage and subsidies through your state-based or federally facilitated Obamacare exchange—either on your own or with the help of a producer.
Use Agent Finder to search for local assistance.
Current information about poverty thresholds and poverty guidelines may also be found at https://aspe.hhs.gov/poverty-guidelines.