Eligibility, Subsidies and Your Plan

Still thinking you might not be able to afford to get health insurance that fits your budget?

It might be more in range than you thought.

For a lot of Americans, there’s help out there. But figuring it all out—such as who’s eligible—can be a little tricky.

In order to be eligible to receive financial help with health insurance, known as a subsidy, one has to sign up for a plan through the government marketplace—healthcare.gov. Those who get insurance through their employer are not eligible for the subsidy.

Here’s another important point: if you can get insurance through an employer, but choose not to, you’re not eligible for a subsidy. If an employer makes insurance affordable for the employee (meaning it can’t be more than 9.5 percent of one’s monthly salary), the family isn’t eligible for the subsidy, either. It’s just the way the law is.

But for those who qualify for a subsidy, here’s how it works.

The government determines how much subsidy someone can get based on the federal poverty level. As a rule of thumb, if your family income is less than four times the federal poverty level, and you’re not eligible for employer- or public-assisted health care such as Medicaid or Medicare, you can receive a subsidy to help pay for insurance.

If your income is below 250 percent of the federal poverty level, you can qualify for a policy for reduced deductible, copayments and lower maximum out of pocket costs.

So what does that mean? A single person making $11,490 a year falls at 100 percent of the poverty level. A single person making $45,960 a year is at 400 percent of the poverty level.

If a household includes more than one person, the government uses a formula to determine the poverty level. A family of four making $94,200 a year would be at 400 percent of the federal poverty level—and would qualify for a subsidy for health insurance.

Let’s look at a hypothetical family of four living in James City County. Dad is 37 years old and makes $50,000 a year; mom is 33 and stays at home with their two children, ages 5 and 2. The family does not have employer-based healthcare and turns to the marketplace.

Insurance plans are broken into “metal levels” called bronze, silver, gold and platinum, determined by the amount of coverage. On a silver plan, our James City County family could get up to a $506/month tax credit. Anthem, for example, has a plan for them that would cost $353/month (after the subsidy is applied). The deductible would be $1,500; primary care office visits would be $30. As is the case with all plans under the Affordable Care Act, annual well visits would be covered at 100 percent.

At Experient Health, we have seen premiums offered as low as $5 a month.

There are online calculators to help people through the navigation process, but it can still be complicated. Figuring out your subsidy means estimating what your think you’re going to make in 2014— that means you could have to pay back some the next tax year if you underestimate. You might be entering information and suddenly be told to check and see if your children qualify for coverage through a state-funded insurance plan.

And some people, unfortunately, do not qualify for a subsidy because they make too little—yet they can’t afford insurance. The Comonwealth of Virginia chose not to expand Medicaid, which would have made insurance available to more people who have little income. Those people don’t have to pay a fine for not getting insurance, but they won’t get insurance, either. State legislators are looking at the issue again, but nothing will change for this year.