How to Estimate Your Obamacare Health Insurance Premiums and Tax Credits

Open enrollment for “Obamacare” will start October 1, 2013 for coverage that will start January 1, 2014. Find your state’s exchange website at Healthcare.gov. Plans will be broken down into four tiers: Bronze, Gold, Silver, and Platinum. People 30 and under will also have a catastrophic coverage-only option. While the cost of these plans will not be based on any pre-existing conditions, they will depend on factors like age, tobacco use, and geographic location.

Based on approved insurance plans in 48 states, the average individual premium will be $328 monthly for the cheapest Silver option and $249 for the cheapest Bronze option. This is before any tax credits. Subsidies will be provided to households with annual income up to 400% of the federal poverty level (FPL) (~$88,000 for a family of four). Individuals and families earning less than 250% of FPL (~$27,000 for an individual and ~$55,000 for a family of four) are also eligible for additional cost-sharing credits.

You can get a rough estimate of your tax credits by using this Kaiser Family Foundation calculator. Once 10/1 rolls around, check the official exchange website instead. Any subsidies are paid directly to the insurer, and you only have to pay the difference.

The Department of Health and Human Services released a report with premium estimates for the 36 states with federally-supported exchanges (data as of 9/18/13).

For example, in Texas, an average 27-year-old with income of $25,000 could pay $145 per month for the second lowest cost silver plan, $133 for the lowest cost silver plan, and $83 for the lowest cost bronze plan after tax credits. For a family of four in Texas with income of $50,000, they could pay $282 per month for the second lowest cost silver plan, $239 for the lowest silver plan, and $57 per month for the lowest bronze plan after tax credits.

HuffPost condenses the tables into a nice map:

Comments

  1. Instead of the PDf report, this is a much better direct link to all the rates: http://aspe.hhs.gov/health/reports/2013/MarketplacePremiums/datasheet_home.cfm

  2. Do you know if the tax credits will apply to people who have almost no income, but have a sizable nest egg?

    My aunt retired early so she currently isn’t eligible for Medicare for at least a few more years.

    Right now she’s living entirely off her savings (around 6-figures). In this case, she has virtually no income but a large savings and retirement account. So would she qualify for any tax credits?

    Thanks for any guidance you can give in this matter!

    • I took a early retirement & have no Inc. my husband is retire & gets s.s. he is on medicare & is 65 which Inc. whould u recommend for me since I am not eligible for medicare.TKS

  3. Sam, I believe she would either qualify for medicaid or for a subsidy. But it may depend on what state she’s in. There has been an asset test for medicaid so if you have a pile of money you can’t get it. But I understand they removed the asset test with the health care reform. That might depend on if the states adopoted the updated medicares systems, so I’m not sure there. Then if she is low income and won’t qualify for states medicaid then she still might get a subsidy via tax credit, but that detail isn’t clear to me.

  4. I haven’t heard of any asset test for Obamacare. I’m guessing your aunt still has some sort of “income” from living off her savings, just not earned income. But she should definitely look into what is available, first Medicaid like Jim suggested and then any tax credits or subsidies.

  5. @KD – Thanks for the alternative link. For some reason that one wasn’t loading for me last night.

  6. Does anyone know that if I am covered under another country’s health care but live in the US, can I be exempted from obtaining obamacare?

  7. I don’t mean to be critical but this all I ever read. I personally don’t care about the average 27 year old or family of four or people within the 400% subsidy range. That is 99% of all media coverage. What about 60 year olds who have to buy their own insurance, what about families of two that are at 800% of the governments official soup line in the sand. That makes up 0% of media coverage.
    What about the rest of us that are going to have to subsidize this program beyond the unprecedented hand outs we already have to pay for.

  8. What an unmitigated disaster. Check out the calculator. Inputs: Texas, 2 people age 64 and 62, income $62,040. Premium is $5,894. Bump the income up $10 to $62,050 and the premium is $15,018.

    “Honey, quit your job before we lose money!”

  9. @Bea and @Naveenl hit the nail on the head.

    Obamacare codifies and sets in stone the current exorbitant healthcare premiums being paid by the productive middle class. Increasing the availability of healthcare to everyone is an important and noble goal that I fully support. However, the way Obamacare is going about implementing it at a huge expense to the dwindling middle class is counter productive – it will further dwindle the middle class. It’s unaffordable and it’s wrong.

  10. Dear Naveen…..disaster ain’t the half of it.

  11. Naveen, what is that couple spending on health insurance now?

  12. dood….your point is well taken. And maybe they have no insurance because that’s what they want….and now from the Government that never stops giving you get a fine from IRS to go along with your choice. Or maybe they do have insurance and when the onslaught of uninsured overwhelm the system seeing a doctor or needing a procedure will be increasingly difficult to do. Just ask our friends in Canada. Or maybe, you’re under the illusion that you still have personal rights and freedom to choose so your forced to leave America to avoid the coercion. Or possibly you just don’t like the fact that in addition to being spied on and having every form of communication you engage in monitored that now per Obamacare all your medical records will be uploaded to a Government database so they can monitor whether your prostrate is engaged in activities that violate the Patriot Act. My point is, that in addition to making an unaffordable system worse and reducing the quality of what will be remembered as a once excellent system in terms of delivery, its more then just about the increase in premiums. And let me end with a revolutionary thought. It used to be, if you can’t afford it….you don’t get it. And that seemed to work pretty good for a long time.

  13. I live in Toronto. tldr

  14. … and I’m not your “friend”, guy.

  15. There is so much wrong with Obamacare, I just don’t know where to begin. Suffice to say that the middle class & business owners will get the shaft on this one.

    As for a solution or a better plan…..I don’t have one…..EXCEPT to say that no healthcare plan currently or on the dreamscape addresses the REAL problem which is why healthcare is so expensive here in the U.S. Anywhere from 5 to 20 times the costs of European counterparts. You need a hip replacement??? GO TO SPAIN!!! You’ll pay about 1/8 to 1/4 the cost of the U.S. equivalent using the exact same hip!!!!

    Oh and nothing in Obamacare will stop the monumental problem we have with illegal aliens walking in the ER for treatment & walking out the front door on any bills. That will only exacerbate the problem as we move forward.

    Our current president has no solutions…..just ideas….bad ones!

  16. The problem with our current system is that *many* uninsured patients walk in the ER and leave without bills (or with minimal bills). That’s the problem — there are many people who choose not to have insurance, and then are bailed out by society when something catastrophic happens. Forcing everyone to keep some minimal insurance (just as in the car insurance context) creates a more efficient system. It’s a bummer if you were one of the people who were essentially free-loading previously, but a system wherein everyone either has insurance or pays a penalty for not having insurance is more efficient and fair than what was occurring previously.

    Incidentally, I’ve done a number of comparisons, and insurance does seem to be cheaper with Obamacare in most scenarios when compared to what similar insurance currently costs.

    So yea, Obamacare is bad if you were (a) previously a free-loader refusing to pay insurance, and (b) do not have to worry about preexisting conditions. It’s pretty good otherwise.

  17. @bobart, that’s a huge simplification of Obamacare.

    Another key part of the plan was to keep a cap on % price differences between the youngest health care market participants vs the oldest. The premiums on the youngest have gone up to subsidize the oldest.

  18. Naveen, you cherry picked a very unusual corner case that about 18 people in the nation might fit. If people have $62k income they’ll likely have jobs which are almost always going to provide health insurance. People ages 62-64 have the most expensive insurance. Neither of these things change at all with Obamacare. THe only difference is Obamacare is paying a subsidy for some people based on their income.

    But yes… if your income is too high you won’t get a handout from the government. You’d prefer we give a subsidy to people with higher incomes?? Your complain then is that Obamacare isn’t subsidizing higher income people more?

    It would be better if they more gradually phase out the premium subsidies so there is no ‘cliff’ at the border of 400% of poverty. That bit of the law is isn’t as well written as it could be.

  19. iceman — of course it is a huge oversimplification — just as everything else that’s been written here (and everywhere else is). It’s an enormously complicated law with a large number of goals and many sophisticated mechanisms of accomplishing those goals.

  20. To Beale:
    I believe you mean “prostate.”

  21. @jim

    A. healthcare expenditures set the bar very very high for someone who would want to work independently and not as a salaried employee. It’s a huge brake on the American Dream of people picking themselves up by their bootstraps and making a living through their ingenuity and hard work.

    B. People with jobs tend to lose them very quickly when they most need healthcare – when they cannot work for health reasons.

    The core problem is that healthcare costs in the U.S. are astronomically high. Obamacare’s fatal flaw is that instead of doing the obvious and pricking the healthcare cost bubble, it does the opposite and enshrines it in law. So, no you will not be subsidizing families who make $62K a year but you will be subsidizing a massively rich and corrupt health system.

    The cost problem has been repeatedly documented. An exhaustive and very informative article on one aspect of this bubble is a Time article by Steven Brill:

    http://livingwithmcl.com/BitterPill.pdf

  22. @dood – It’s not a question of what anyone’s paying or not paying right now. The question is “How on earth can the government force me to spend my income on anything?”

    @jim – It’s just an example. Why would the government intentionally disincentivize a citizen from earning a marginal dollar? Assuming no nefarious intentions, (and I realize that this is a very debatable assumption with the current administration) they would never want to do so. Yet, that’s exactly what’s happening here. My complaint is absolutely not that we aren’t subsidizing high income people more; rather, it is that we are subsidizing anybody at all. It’s absolutely inarguable that the couple in the example who had earned $62,040 YTD in November would cease all income-generating activity immediately if they act rationally. They would be financially worse off otherwise. And yes, a couple earning $62,040 in 2013 likely has access to employer-provided health insurance. How likely do you think it is that employer-provided health insurance will be as widespread as it is today in 2048, when I’m the 64-year-old in the example?

    As an aside, ain’t it great how Congress voted to subsidize themselves and their staffs regardless of their own income level? They’re turning us from citizens to subjects.

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