Health subsidy changes are new to most people. They have many questions about how it works and whether a person is eligible.
Eligibility
The subsidy will generally be available for individuals and families who are U.S. citizens.
Up to 400% of the Federal Poverty Level
The subsidies are designed to help those that make up to 400% of the Federal Poverty Level afford health insurance. Those amounts are located here.
The qualifications also have a “look back period”. So, for example, your April 2013 tax filing (for 2012 income) will dictate your 2014 eligibility. Anyone below or between 133% and 150% of the FPL may qualify for no-cost Medicaid. From that baseline up to 400% of the FPL, you will likely be eligible for a health subsidy. There is NO subsidy for those above 400% of poverty. Click here for more details about the 400% Rule.
How much Health Subsidy can you Expect? (Hint: 9.5% of your income becomes a factor)
So, assuming you qualify for a health subsidy based on the 400% Rule of the FPL, how much will you receive?
There are two factors:
First, how much is the underlying health insurance plan premium itself? This is dictated by your age, area and family composition.
The second factor is the 9.5% Rule, which means you shouldn’t have to pay more than 9.5% of your MAGI (Marginal Adjusted Gross Income) towards health insurance. So, if you make $1,000 monthly in MAGI, your health insurance shouldn’t be more than $95/monthly. As you go down the scale, the percentage actually drops lower than 9.5%. If your health insurance is $400/monthly, your expected subsidy would be $305/monthly or more than $3600 annually. We recommend using a Health Subsidy Calculator for an estimate.
