Could you reduce your monthly health insurance premium or what you pay out of pocket for healthcare expenses covered by your Obamacare plan? Perhaps.
The Affordable Care Act’s premium tax credits and cost-sharing reductions can help many Americans lower their health insurance premiums and out-of-pocket costs. However, to take advantage of these subsidies, you must both:
- Buy your health insurance plan from a state-based or federally facilitated exchange.
- Meet household income guidelines related to the subsidy, or subsidies, for which you apply.
NOTE: Premium tax credits may be applied to plans of all metal levels; however, cost-sharing reductions are only available with a silver plan.
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 percent of the federal poverty level
- Cost-sharing reductions: 100 – 200 percent of the federal poverty level
Your health insurance subsidy for the current year is based on the previous year’s federal poverty guidelines. That means 2017 subsidies are based on the 2016 federal poverty guidelines, which are available through the Department of Health & Human Services.
The 2016 poverty guidelines show that $12,071 is the poverty threshold for a one-person household. Based on these numbers alone, 100 to 400 percent of the federal poverty level for a single person would be $12,071 to $48,284. However, this person may or may not be eligible for a premium tax credit.
Please 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.1 Furthermore, state benchmark plans (i.e., the second lowest cost silver plan) can also impact subsidy amounts and eligibility.2 You can estimate your premium tax credit using online calculator tools such as the one available through www.healthedeals.com.
To verify your final eligibility, 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. If you have questions about the subsidies available to you or need assistance shopping for health insurance, contact a producer using the number located at the top of your screen. Use Agent Finder to find local assistance.