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What you'll actually pay for Obamacare
What you'll actually pay for Obamacare
By Tami Luhby @Luhby August 21, 2013: 6:04 AM ET
NEW YORK (CNNMoney)
Millions of Americans won't have to pay full price for their Obamacare health insurance next year. But just how much they'll have to fork over depends on a couple different things.
Thanks to subsidies from the federal government, which will help pay for health insurance on state-based exchanges starting in 2014, many low- to moderate-income Americans will get a break on their premiums.
The Kaiser Family Foundation estimates that 48% of Americans who buy individual insurance today would be eligible for subsidies. They would receive an average of $5,548, which would cover 66% of the price.
"The subsidies are pretty large for the people who get them," said Gary Claxton, vice president at the foundation, noting that a larger share of new enrollees in the individual market will be eligible for subsidies since they are likely to be lower income Americans who cannot not afford coverage now.
Here's how you qualify:
Your income: Anyone earning up to 400% of the poverty line will be eligible for a subsidy, which is up to $45,960 for an individual and $94,200 for a family of four.
The lower your income, the larger your subsidy. For instance, those making $17,235 a year will pay no more than 4% of income, or $57 a month, while those with incomes between $34,470 and $45,960 will pay a maximum of 9.5% of income, or $364 a month. The federal government will cover the rest.
Anyone earning more than $45,960 would be responsible for the entire tab on the Obamacare health plan of his choice.
In addition to premium subsidies, those making less than 250% of the poverty line, or $28,725 for a single person and $58,875 for a family of four, are eligible for extra subsidies to defray out-of-pocket costs, such as deductibles and co-payments.
When signing up for Obamacare, enrollees can apply for an advanced subsidy by estimating their income. Payments go directly to the insurer. Their subsidy level is then adjusted once they file a tax return with their actual income for the year, so in many cases they may have to repay some of the subsidy if they underestimated or get a refund if they thought they'd earn more than they actually did.
Enrollees can also opt to pay the entire premium up front and get a refund at tax time.
Related: Obamacare: Is a $2,000 deductible 'affordable?'
Your state: If you qualify, the size of your subsidy will vary by where you live. That's because the amount is based on the cost of the second-lowest silver plan in your area and works on a sliding scale.
To get a better idea of the subsidy amounts, take a look at California, where a 40-year-old can buy the second-cheapest silver plan for $294 a month.
If that resident made just under $17,235, he would get a subsidy of $236 and pay a maximum of $57. That person would also have no deductible and pay only $3 for primary care visits because he is getting additional subsidies to minimize his out-of-pocket costs.
If his income was just under $28,725, his subsidy would only be $101 and he'd have to fork over as much as $193 a month. He'd have a $1,500 deductible and pay $40 a visit.
And if that Californian earned $45,960 or more, he would pay the full cost of up to $294 a month and receive no subsidy. His deductible would be $2,000 a month and his co-pay would total $45 per visit.
(These figures are statewide averages and vary by region.)
While the subsidies will certainly help, many folks may still think Obamacare is pretty pricey.
"For a lot of people who are barely making the rent and struggling to pay for groceries, even a very modest premium can seem out of reach," said Sabrina Corlette, senior research fellow at Georgetown's Health Policy Institute.
To see how large a subsidy you might receive, check out: http://kff.org/interactive/subsidy-calculator/
http://money.cnn.com/2013/08/21/news/economy/obamacare-subsidies/index.html?hpt=hp_t2
By Tami Luhby @Luhby August 21, 2013: 6:04 AM ET
NEW YORK (CNNMoney)
Millions of Americans won't have to pay full price for their Obamacare health insurance next year. But just how much they'll have to fork over depends on a couple different things.
Thanks to subsidies from the federal government, which will help pay for health insurance on state-based exchanges starting in 2014, many low- to moderate-income Americans will get a break on their premiums.
The Kaiser Family Foundation estimates that 48% of Americans who buy individual insurance today would be eligible for subsidies. They would receive an average of $5,548, which would cover 66% of the price.
"The subsidies are pretty large for the people who get them," said Gary Claxton, vice president at the foundation, noting that a larger share of new enrollees in the individual market will be eligible for subsidies since they are likely to be lower income Americans who cannot not afford coverage now.
Here's how you qualify:
Your income: Anyone earning up to 400% of the poverty line will be eligible for a subsidy, which is up to $45,960 for an individual and $94,200 for a family of four.
The lower your income, the larger your subsidy. For instance, those making $17,235 a year will pay no more than 4% of income, or $57 a month, while those with incomes between $34,470 and $45,960 will pay a maximum of 9.5% of income, or $364 a month. The federal government will cover the rest.
Anyone earning more than $45,960 would be responsible for the entire tab on the Obamacare health plan of his choice.
In addition to premium subsidies, those making less than 250% of the poverty line, or $28,725 for a single person and $58,875 for a family of four, are eligible for extra subsidies to defray out-of-pocket costs, such as deductibles and co-payments.
When signing up for Obamacare, enrollees can apply for an advanced subsidy by estimating their income. Payments go directly to the insurer. Their subsidy level is then adjusted once they file a tax return with their actual income for the year, so in many cases they may have to repay some of the subsidy if they underestimated or get a refund if they thought they'd earn more than they actually did.
Enrollees can also opt to pay the entire premium up front and get a refund at tax time.
Related: Obamacare: Is a $2,000 deductible 'affordable?'
Your state: If you qualify, the size of your subsidy will vary by where you live. That's because the amount is based on the cost of the second-lowest silver plan in your area and works on a sliding scale.
To get a better idea of the subsidy amounts, take a look at California, where a 40-year-old can buy the second-cheapest silver plan for $294 a month.
If that resident made just under $17,235, he would get a subsidy of $236 and pay a maximum of $57. That person would also have no deductible and pay only $3 for primary care visits because he is getting additional subsidies to minimize his out-of-pocket costs.
If his income was just under $28,725, his subsidy would only be $101 and he'd have to fork over as much as $193 a month. He'd have a $1,500 deductible and pay $40 a visit.
And if that Californian earned $45,960 or more, he would pay the full cost of up to $294 a month and receive no subsidy. His deductible would be $2,000 a month and his co-pay would total $45 per visit.
(These figures are statewide averages and vary by region.)
While the subsidies will certainly help, many folks may still think Obamacare is pretty pricey.
"For a lot of people who are barely making the rent and struggling to pay for groceries, even a very modest premium can seem out of reach," said Sabrina Corlette, senior research fellow at Georgetown's Health Policy Institute.
To see how large a subsidy you might receive, check out: http://kff.org/interactive/subsidy-calculator/
http://money.cnn.com/2013/08/21/news/economy/obamacare-subsidies/index.html?hpt=hp_t2
Forgot to say, I probably will call that number, and will continue to research.
You're right that only the portion drawn out over the course of the year is taxable.
I think I read somewhere that only what you draw out of your account is considered taxable income but dont have a source as yet. You might call that number on the sight and talk to a live person. They supposedly are there to answer those types of questions. If you find out something before I do, let us know?
"It is simply supposed to go by your income and family size". Therein lies my question... "Income" for seniors, with retirement accounts, can change depending on how much they choose to draw from those accounts, so what stops the government from saying "you have xxx,xxx in retirement savings, you can afford to pay more"?
If savings and retirement don't factor in, how would they differentiate the wealthy from anyone else?
If you find something, I'd really appreciate it.
If savings and retirement don't factor in, how would they differentiate the wealthy from anyone else?
If you find something, I'd really appreciate it.
I dont think so, but that is a really good question. It is simply supposed to go by your income and family size. Savings and retirement doesnt factor into it I dont think. I will see what I can find but pretty sure it doesnt apply.
I really do appreciate all the links to calculators, etc, but they don't specifically answer my question and I don't think it's going to be answered until I actually start looking for insurance.
If I just go by what we will be claiming for income this year, I can easily calculate it. My question is: will they assume that people with retirement savings (IRA/401K) can afford to pay more, forcing us to tap into funds we've saved to get us through our old age, in order to pay for insurance?
I've had this question asked to me by people, about my age or a bit younger, who are not wealthy by anybody's standards, but have saved enough to supplement SS and be comfortable, if they aren't traveling to Europe and buying designer clothes and new cars every year, etc.
If I just go by what we will be claiming for income this year, I can easily calculate it. My question is: will they assume that people with retirement savings (IRA/401K) can afford to pay more, forcing us to tap into funds we've saved to get us through our old age, in order to pay for insurance?
I've had this question asked to me by people, about my age or a bit younger, who are not wealthy by anybody's standards, but have saved enough to supplement SS and be comfortable, if they aren't traveling to Europe and buying designer clothes and new cars every year, etc.
Heck, I have really no concrete idea of what I'll make this year, let alone next.
It truly is a guess for me.
It truly is a guess for me.
actually that should be 2014 instead 2013
Which does bring us to a part of this deal that I don't like and bet others will find difficult. You do essentially have to make an educated guess as to your income info you provide for the subsidy. Guess to low and you'll pay more in 2013 incomes taxes where the difference will be made up. Not to bad for a full time hourly or salaried person, but difficult for a general contractor.
Obviously Barb's case does high light the issue as well.
Hi Barb,
Will you receive about the same income this year as last?
Get out last years Federal 1040 that you filed or
"Eligibility for Medicaid and premium and cost sharing assistance will be based on a household’s Modified Adjusted Gross Income (MAGI). For most taxpayers, MAGI is the same as Adjusted Gross Income (AGI) which can be found on Line 4 on a Form 1040EZ, Line 21 on a Form 1040A, or Line 37 on a Form 1040. "
Then take that number and plug it in here
http://healthconnect.vermont.gov/tax_credit_calculator
And it should give you the approximate subsidy (or none) you will receive.
This subsidy is federal, so should be the same across all states. Rates in states will very, but not the federal subsitiy.
That should give you part of the puzzle--then that will offset your premium.
Will you receive about the same income this year as last?
Get out last years Federal 1040 that you filed or
"Eligibility for Medicaid and premium and cost sharing assistance will be based on a household’s Modified Adjusted Gross Income (MAGI). For most taxpayers, MAGI is the same as Adjusted Gross Income (AGI) which can be found on Line 4 on a Form 1040EZ, Line 21 on a Form 1040A, or Line 37 on a Form 1040. "
Then take that number and plug it in here
http://healthconnect.vermont.gov/tax_credit_calculator
And it should give you the approximate subsidy (or none) you will receive.
This subsidy is federal, so should be the same across all states. Rates in states will very, but not the federal subsitiy.
That should give you part of the puzzle--then that will offset your premium.
If you have lower income and live in a state that isn’t expanding Medicaid
If you live in a state that’s not expanding Medicaid and you don’t qualify for Medicaid under your state’s current rules, one of two situations applies to you:
•
If your income is more than about $11,500 a year as a single person (about $23,500 for a family of 4, or 100% of the federal poverty level), you will be able to buy health insurance in the Marketplace and get lower costs based on your household size and income.
•
If you make less than about $11,500 a year as a single person (about $23,500 for a family of 4), you’ll be able to get insurance in the Marketplace--but you won’t be able to get lower costs based on your income. If you buy insurance in the Marketplace, you will have to pay full price.
https://www.healthcare.gov/what-if-my-state-is-not-expanding-medicaid/#state=florida
If you live in a state that’s not expanding Medicaid and you don’t qualify for Medicaid under your state’s current rules, one of two situations applies to you:
•
If your income is more than about $11,500 a year as a single person (about $23,500 for a family of 4, or 100% of the federal poverty level), you will be able to buy health insurance in the Marketplace and get lower costs based on your household size and income.
•
If you make less than about $11,500 a year as a single person (about $23,500 for a family of 4), you’ll be able to get insurance in the Marketplace--but you won’t be able to get lower costs based on your income. If you buy insurance in the Marketplace, you will have to pay full price.
https://www.healthcare.gov/what-if-my-state-is-not-expanding-medicaid/#state=florida
Yes, thanks Mike
The Health Insurance Marketplace: If you're under 65 and don't have Medicare or Medicaid coverage, you can find coverage and pricing options in the Health Insurance Marketplace. You may qualify for savings on your monthly premiums or lower out-of-pocket costs for private insurance.
https://www.healthcare.gov/how-does-the-affordable-care-act-affect-me/#question=seniors
https://www.healthcare.gov/will-i-qualify-to-save-on-monthly-premiums/
https://www.healthcare.gov/what-is-the-health-insurance-marketplace/#state=florida
https://www.healthcare.gov/how-does-the-affordable-care-act-affect-me/#question=seniors
https://www.healthcare.gov/will-i-qualify-to-save-on-monthly-premiums/
https://www.healthcare.gov/what-is-the-health-insurance-marketplace/#state=florida
One thing that might happen in your situation is that you may be able to get medicare early. I will see what I can find but another link is healthcare.gov and there is a phone number there that you can call anytime of the day and night and someone will answer your questions.
Also keep in mind that here in Fl, they are refusing the Medicaid expansion which will not effect you but the other thing they are doing will possibly.
In the state of Florida, we’re seeing the disastrous effects of Republican obstructionism right now. Governor Scott and his allies in the state legislature blocked part of Obamacare from taking effect and are doing everything possible to discredit the law.
They eliminated our state Insurance Commissioner’s ability to approve rates on insurance prices for the next two years. Previously, Florida’s insurance commissioner had critical oversight powers, and he occasionally used them to reject unfair health plan rate increases.
Also keep in mind that here in Fl, they are refusing the Medicaid expansion which will not effect you but the other thing they are doing will possibly.
In the state of Florida, we’re seeing the disastrous effects of Republican obstructionism right now. Governor Scott and his allies in the state legislature blocked part of Obamacare from taking effect and are doing everything possible to discredit the law.
They eliminated our state Insurance Commissioner’s ability to approve rates on insurance prices for the next two years. Previously, Florida’s insurance commissioner had critical oversight powers, and he occasionally used them to reject unfair health plan rate increases.
Thanks for the link; I'm still trying to figure it out, because the calculator seems to be more for working families than retirees, with some savings.
Thanks for the link, mike.
Brice, I don't think your employer will see much of a difference.
Barb, take a look at this and see if you can get an idea of what it will cost.
Remember that the state of Florida is leaning against the insurance exchange and that might disadvantage you. I don't know enough to say but I suspect that not setting up an exchange isn't a good idea. And I think in time all of the states will get in line.
Here is the link: http://obamacarefacts.com/costof-obamacare.php
Barb, take a look at this and see if you can get an idea of what it will cost.
Remember that the state of Florida is leaning against the insurance exchange and that might disadvantage you. I don't know enough to say but I suspect that not setting up an exchange isn't a good idea. And I think in time all of the states will get in line.
Here is the link: http://obamacarefacts.com/costof-obamacare.php
Thanks for the article mike.
How will affect people like us, who are retired, on SS, but not yet on Medicare? Will our IRA's be calculated into it, or will we have to pay full price, because we aren't broke?
New York launches ad promoting state's ObamaCare exchange
By Sam Baker - 08/20/13 12:17 PM ET
New York state rolled out its ObamaCare insurance exchange Tuesday with a new advertisement and a new name: New York State of Health.
New York is among the 14 states that chose to set up its own insurance exchange, and several of those states have begun publicizing their new marketplaces ahead of their scheduled opening on Oct. 1.
The Obama administration previously got some good news on insurance premiums from New York. Premiums will fall by as much as half for some policies in some parts of the state.
The states that have embraced ObamaCare are taking uniquely local approaches to their marketing campaigns.
Oregon has debuted a series of ads with acoustic songs about health insurance, while officials in Kentucky are promoting their marketplace at bourbon festivals and California is looking for partnerships in the entertainment industry.
New York continued that trend in naming its exchange — a play on "New York State of Mind" — and its Web video. The advertisement shows scenes from various parts of the state and features multiple narrators, framing the insurance marketplace as a safety net in the pursuit of diverse life goals.
http://thehill.com/blogs/healthwatch/health-reform-implementation/317839-new-york-launches-ad-promoting-states-obamacare-exchange
"The federal government will cover the rest." No the tax payers will cover the rest.
Just heard this morning that in my state NY they are setting up a system where it is going to be open competition so you have a choice from several different companies. Which is the best thing to come from Obamacare and something I have said for a while now. Open competition will help bring costs down.
Just heard this morning that in my state NY they are setting up a system where it is going to be open competition so you have a choice from several different companies. Which is the best thing to come from Obamacare and something I have said for a while now. Open competition will help bring costs down.
Our insurance in this household is paid for mostly by our employers. Will what they pay become more affordable?
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