Understanding Eligibility for Affordable Care Act Subsidies: How to Lower Your Health Insurance Costs

Affordable Health Insurance

Insurance through the marketplace is the best way to get free or low-cost health insurance plans.

Low-income people and families are able to get a subsidy to help with providing them with affordable health insurance. Subsidies make it easier for people to enroll in the marketplace and get subsidies to help with the cost of their health insurance.

The subsidies are available through the federal government and many states offer subsidies as well. The subsidies are based on income and family size. If you qualify for a subsidy, you will be able to get free or low-cost health coverage.

What Information Do You Need to Get Health Coverage?

While the application process is simple, not having all of the necessary information can create headaches with obtaining health coverage.

To apply for a subsidy, you will need to provide some information about your household size and income. You will also need to provide some information about your health insurance coverage.

This includes whether you have any other health insurance coverage, such as through an employer or if you are paying out of pocket to any private insurance companies. You will also need to provide information about your citizenship or immigration status.

What Is Marketplace Health Insurance?

Under the Affordable Care Act, the United States government is helping to provide millions of middle-class Americans and people or families with low incomes, with access to free or low-cost health care.

This has provided a path for low-income people and families to be able to get small premiums and have the marketplace provide coverage.

The Health Insurance Marketplace is a way to find and compare health insurance plans in your area and find the most affordable health insurance available.

It shows what subsidies or discounts you may qualify for, compare plans side-by-side, and enroll you in a low-cost insurance plan through the Marketplace.

Marketplace Insurance Plan Types

There are four “metal” levels of plans available through the Marketplace: Bronze, Silver, Gold, and Platinum. The subsidies make it so that you can get a lower monthly premium or out-of-pocket costs for health insurance.

• Bronze health care plans provide the lowest monthly premium, but also have the highest costs out-of-pocket.
• Silver health care plans have higher monthly premiums than Bronze, but lower costs out-of-pocket.
• Gold health care plans have higher monthly premiums than Silver, but lower cost out-of-pocket.
• Platinum healthcare plans have the highest monthly premiums but also have the lowest out-of-pocket expenses.

You can get subsidies for all four “metal” levels of plans, but the subsidies will be greater for the lower monthly premium plans.

What is a Subsidy?

Health insurance through the marketplace is available to those who qualify for a subsidy. This subsidy is financial assistance from the federal government to help pay for health insurance.

Eligibility for a subsidy is based on household income. The lower your income the more help you will receive.

Subsidies can be used to pay for health insurance purchased through the marketplace, this is how millions of Americans have found access to low cost health coverage, a more affordable health insurance plan, or even more comprehensive coverage.

Family status and size are crucial in determining what plan’s benefits with most household incomes between 100% to 400% of the federal government poverty level being able to qualify for a premium subsidy. Listed below are the total costs listed by qualifying income ranges in 2021 for the 48 contiguous U.S. states and the District of Columbia, Alaska, and Hawaii have separate poverty levels.

Income Limits for ACA Premium Subsidies¹

• Individual: $12,880-$51,520
• Family of 2: $17,420-$69,680
• Family of 3: $21,960-$87,840
• Family of 4: $26,500-$106,000
• Family of 5: $31,040-$124,160
• Family of 6: $35,580-$142,320
• Family of 7: $40,120-$160,480
• Family of 8: $44,660-$178,640

How does a Subsidy Provide Health Insurance?

If you’re looking for free or low-cost health coverage, subsidies may be able to help.

Subsidies are available through the Marketplace and can help provide you with more affordable health insurance. The federal government provides subsidies to help low-income people and families pay for health insurance.

These subsidies provide financial assistance for marketplace plans by helping people get low premiums the amount the subsidy will pay depends on household income and other coverage someone might have.

To see if you qualify, simply fill out a subsidy application.

If you’re approved, you’ll be able to choose from a variety of plans that fit. If you qualify for a subsidy, you will be able to use it to lower the cost of your monthly premiums. You may also be able to use it to lower your out-of-pocket costs, such as deductibles, co-payments, and co-insurance.

Tax Implications

It’s important to note that subsidies are considered tax credits.

The tax implications of this are that the government will help pay for health coverage based on your income through premium tax credits. This means that if you receive a subsidy, you will need to report it on your taxes.

However, subsidies can still save you money on your health insurance costs. In some cases, subsidies can even lower your overall tax bill.

This premium tax credit is reconciled against the advanced credit payments to subsidize someone’s health coverage. This payment reconciliation is how some people can be over-subsidized or under leading to either an additional tax liability or an additional refund.

All of this is based on your individual circumstances.

If you think you might qualify for a subsidy, the best way to find out is to fill out an application with a licensed agent.

Applying is easy and only takes a few minutes. Once you know if you qualify, you can then start shopping for the right health insurance marketplace plan for your needs.