January 25, 2013

Next Year ObamaCare Could Pay a Typical Uninsured Family $8,462

Did you know that in 2014 one the new elements of the Affordable Care Act (aka Obamacare) will kick in which will subsidize health insurance for low/mid income families?   You may have heard something about that detailed buried in amongst the partisan hyperbole when they were debating the law.    Did you know that those subsidizies will be in the form of tax credits to help families pay for health insurance if they aren't eligible for insurance from their employer?  

 The Kaiser Family Foundation has a calculator to estimate the amount of the subsidy based on age, income and some other factors. 

The tax credit mandated by Obamacare to subsidize health insurance are expected to be around $8,462 for a family of 4 with 42 year old policy holder and a $55,000 annual income.

The subsidy will vary based on the details.   A 40 year old single person with the same $55,000 income would not get any subsidy as their individual insurance is much cheaper.


Now don't get all excited, this subsidy is not available if you can get insurance from your employer.   So for most people theres no changes and no subsidy.   The tax credit is meant to help people pay for health insurance who don't already get insurance from work.    You can also only get the credit if you buy insurance through an exchange.   And the credit is setup to pay part of your insurance so families will often also have a share of the expense to pay themselves.   Its not like the government pays you $8462 and you get to do whatever with it, that amount is based on an assumption that insurance will cost $12,597 and the family pays the other $4,135.   Thats what the KFF site says.  
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2 comments:

  1. And since most employees get insurance tied in with their employment, this means that employees will not get it. How would families that are not employed get it? Does this mean that the employed population will pay for the unemployed portion of the state for their insurance?

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  2. Justin,

    Here's an QA item on the subsidies:
    http://healthreform.kff.org/en/faq/who-will-be-eligible-for-subsidies.aspx

    THe subsidy is a tax subsidy for people who buy insurance independently on the exchange market. It is not available if you qualify for medicare, medicaid, VA, chips or if your employer offers qualified coverage. That rules out around 85% of the population. If you make too much you don't qualify. That will rule out another 2-5%. If you're currently uninsuredd then but you're employed then your insurer should be offering you insurance usually and that will rule out another %. Altogether probably around 90-95% of the population won't qualify for subsidies.

    Whether you are employed or not it will work the same. However if you are unemployed and your income is under 133% of poverty then you can qualify for medicaid instead.

    Jim

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