If you’re concerned about the cost of health insurance once the state exchanges are up and running, don’t fear if you are middle or low income. Built into the Affordable Care Act are two different kinds of subsidies to assist with health insurance costs.
The first is known as a premium assistance tax credit. This is a monthly amount to reduce the payments towards health insurance for an individual or family. This was developed based on what’s known as a sliding scale, so that those people with the lowest income and in need of the most help are able to receive it. The second is known as cost-sharing assistance, which caps the out of pocket costs for a person (and also helps to cut down on other cost-sharing factors such as co-pays or deductibles). Every person who obtains their health insurance through an exchange will have caps on their individual spending. Any person or family with an income under 400 % of the federal poverty level will also get lower caps, depending on their exact income level.
The limits and incomes are based on the relationship from the consumer or family’s earnings when compared to the federal poverty level. For example, any family whose income falls under 400% of the federal poverty level (such as $89,000 for a family of four), will receive subsidies and cost-sharing in order to help afford the cost of insurance. If health insurance coverage is available through an employer but deemed to be too costly (more than 9.5% of household income) subsidized coverage through an exchange is also available.
To learn more about the impact of the Affordable Care Act on your family, contact a licensed health insurance agent today for more information and to have your questions answered.