Under Obamacare, Will You Receive a Subsidy to Help You Buy Your Own Insurance? We Now Have Real Numbers That Will Let You Calculate How Much You Will Receive

 

Note to Readers: A longer version of this post appeared yesterday on HealthInsurance.org.

Up until now, when Obamacare’s supporters and reform’s opponents squabbled over what insurance will cost in 2014, they had to rely on estimates and national averages. But now we have real numbers.

Eleven states have announced the rates that insurers will be charging in their Exchanges-marketplaces where individuals who don’t have employer-sponsored coverage can shop for their own insurance.

Subsidies Will Be Based On the Cost Of A Silver Plan Where You Live,

Middle-income as well as low-income people buying coverage in the Exchanges will be eligible for government subsidies that will come in the form of tax credits. Anyone earning between 100 and 400 percent of the federal poverty level (FPL) (now $11,490 to $45,960 for a single person, and up to $126, 360 for a family of six) will qualify.

Most people who are forced to buy their own insurance earn less than 400% of FPL. More affluent Americans usually work  for companies that offer comprehensive coverage.

The graph below shows average Silver plan rates in the eleven states that have disclosed premiums. (Note that these are only state averages. Premiums vary widely within a state: In some cities and counties silver plan rates will be much lower, even before you apply the subsidy.

Silver plan premiums

It’s worth noting that in these 11 states the least expensive Silver Plan costs 18% less than the non-partisan Congressional Budget Office projected last year. 
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Under the ACA, will YOUR Insurance Premiums Rise or Fall?

Today, many Americans are asking: will my premiums go up in 2014?

There is no simple answer.

According to Families USA ,the Affordable Care Act (ACA) will have a positive effect on the typical family’s budget. Using an economic model that can factor in all provisions of the Act (ACA), Family’s USA estimates that by 2019, when the law is fully implemented, “the average household will be $1,571 better off.”

Even high-income families will save: thanks to rules that limit co-pays, and reward providers for becoming more efficient, “those earning $100,000 to $250,000” will spend $779 less on medical care.” But these are “averages.” They don’t tell you whether your health care costs will rise or fall.

The answer will depend on: your income, your age, your gender, who you work for, what state you live in, whether a past illness or injury has been labeled a “pre-existing condition,”  and what type of insurance you have now: 

If you work for a large company:

–  The ACA will have a “negligible” effect on your premiums says the Congressional Budget Office(CB0). This doesn’t mean that your costs won’t climb at all in 2014. As  long as medical product-makers and providers continue to raise prices, premiums will edge up each year.

But in 2012 average premiums for employer-based insurance rose by just 3% for single coverage and 4% for families, a “modest increase” when compared to 8% to 12% jumps in past years. And on average, employee co-pays and deductibles remained flat.

Granted, a 3% to 4% increase still outpaces growth in workers’ wages (1.7% percent) and general inflation (2.3%) percent).But as reform reins in spending annual increases for large groups could fall to 2%–or less. 

If you work for a small company with more than 50 employees:

Your boss will be more likely to offer affordable benefits, in part because, if he doesn’t, he will have to pay a penalty

Moreover, he will find insurance less expensive. Today, small businesses pay 18% more than large companies because the administrative costs of hand-selling plans to small groups are sky-high. But starting in 2014  businesses with fewer than 100 employees will begin buying insurance in “Exchanges” where they will become part of a large group, and eligible for lower rates.

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Subsidies: Will You Receive a Tax Credit to Help You Buy Insurance in 2014? How Much?

Beginning in 2014, millions of Americans will discover that they qualify for subsidies designed to help them purchase their own health insurance. The aid will come in the form of tax credits, and many will be surprised by how generous they are.

Not only low-income, but moderate-income families earning up to 400 percent of the federal poverty level (FPL) – currently $44,680 for a single person and $92,200 for a family of four – will make the cut.

Yesterday, I posted about subsidies on healthinsurance.org. The post includes a calculator which tells you whether you would be eligible, and how much you would receive. Even if your employer offers health benefits, you might qualify for a tax credit  if the plan too expensive, or too skimpy. (I explain how the government defines those terms.) I also explain how the government calculates subsidies, and what happens if you live a place where healthcare is particularly expensive.

Click here for the full post   If you like, come back here to comment.

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