The Subsidy Calculator is based on the Affordable Care Act (ACA) as signed into law in 2010, and subsequent regulations issued by Health and Human Services (HHS) and the Internal Revenue Service (IRS). Premiums in the calculator are illustrative examples in 2014 dollars derived from estimates of average premiums for 2016 from the Congressional Budget Office. We assume an average premium for a single adult enrolled in the second-lowest cost Silver plan to be $4,827 (before subsidies). This estimate was derived by multiplying the
CBO estimate for a family premium by 37% (the average ratio of single to family premiums in previous CBO estimates) and then adjusting for assumed inflation and differences over time in the aggregate reinsurance pool to arrive at a 2014 estimate. Premiums could vary from this amount due to assumptions insurers make in setting premiums or the degree of competition in the market, and will also differ based on regional variations in underlying health costs. Premiums for Bronze plans are based on the estimated Silver and ratio of claims expenses between Bronze and Silver plans in the HHS actuarial value calculator.
The premium is adjusted for family size, tobacco usage, and age of the user. Premiums in the calculator vary by age within the three to one limit specified in the law, using age factors from proposed regulations issued by HHS. The calculator assumes a tobacco surcharge of 50% above the premium of a non-smoker, which is the maximum allowed under the law. Actual tobacco surcharges will vary by plan and some states do not permit insurers to vary premiums by tobacco status.
Premium subsidies are based on Silver coverage (which has an actuarial value of about 70%). Enrollees may pay a lower premium for less comprehensive coverage (i.e., a Bronze plan, with an actuarial value of 60%) or may purchase more comprehensive coverage (i.e. a Gold plan, with an actuarial value of 80% or a Platinum plan with an actuarial value of 90%). People receiving subsidies can apply their subsidy toward the purchase of more or less expensive plans, but must pay difference between the premium in the selected plan and the subsidy. Premium subsidies may not cover the cost of a tobacco surcharge.
The law also makes available a catastrophic policy for young adults and those exempted from the requirement to obtain insurance due to affordability. Catastrophic plans are less comprehensive and have a lower premium than other coverage. Eligibility to purchase catastrophic coverage is reflected in the calculator, when applicable. Premium subsidies may not be applied to catastrophic coverage.
This tool illustrates health insurance premiums and subsidies for people purchasing insurance on their own in new health insurance exchanges (or “Marketplaces”) created by the Affordable Care Act (ACA). Beginning in October 2013, middle-income people under age 65, who are not eligible for coverage through their employer, Medicaid, or Medicare, can apply for tax credit subsidies available through state-based exchanges.
Additionally, states have the option to expand their Medicaid programs to cover all people making up to 138% of the federal poverty level (which is about $33,000 for a family of four). In states that opt out of expanding Medicaid, some people making below this amount will still be eligible for Medicaid, some will be eligible for subsidized coverage through Marketplaces, and others will not be eligible for subsidies.
With this calculator, you can enter different income levels, ages, and family sizes to get an estimate of your eligibility for subsidies and how much you could spend on health insurance. As premiums and eligibility requirements may vary, contact your state’s Medicaid office or exchange with enrollment questions.