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• Obamacare makes Tax Credits available for incomes between 100 percent and 400 percent of the federal poverty guideline amount.
• Incomes between 150 percent to 250 percent of the federal poverty guideline amount qualify for out-of-pocket expense assistance.
• Incomes less than 138 percent of the federal poverty guideline amount qualify for Medicaid for adults and CHIPs for children.
Obamacare offers health insurance plans through sixteen state exchanges and the federal website healthcare.gov. Anyone can shop there regardless of income. However, certain cost savings are limited by income. Income can be too high or too low to get these benefits.
Comparison Shopping for Value
When shopping for health insurance during the open enrollment period, it is important to compare the health insurance terms and coverage. Comparison shopping is the best way to find the best match and value among Obamacare plans and off-exchange private plans. The value in a given plan is not only in the price and rate of monthly premiums, but it is also in the extent to which it meets the needs of the individual or family consumer.
The Obamacare Income Limit
There is no income limit on Obamacare because the reforms cover every health insurance policy; all health insurance policies must meet the essential protections of the Affordable Care Act. The protections include denials of coverage because of illness or pre-existing conditions, charging greater amounts based on gender, and coverage of mental health and treatment for addictions. These include wellness reforms in employer plans and essential heath benefits.
Maximum Incomes for Premium Benefits
The 2015 Federal Poverty Line for an individual was $11,770, and for a family of four was $24,250. Adjusting for 400 percent yields:
- $11,770 x 400% for individuals, and $24,250 x 400% for a family of four
- up to $47,080 per year for an individual
- up to $99,000 per year for a family of four
Limits on Subsidies and Payment Assistance
Income does limit the use of subsidies and payment assistance benefits under the Affordable Care Act.
- The law limits these benefits to persons with incomes at or below 400 percent of the federal poverty guideline.
- Those with incomes above 400 percent of the federal poverty guideline cannot get cost sharing reduction subsidies and premium tax credits.
- Those with incomes between 150 percent to 250 percent of the federal poverty guideline amount qualify for out-of-pocket expense assistance on silver plans.
Shopping Outside of Obamacare
Those whose incomes exceed 400 percent of the federal poverty guideline figure are not eligible for premium subsidies or payment assistance. These consumers still benefit from the Affordable Care Act by legal standards the require essential protections and prohibit unreasonable denials and charges.
When shopping outside of Obamacare assistance, the prices will not go down because of subsidies or payment assistance.
The plans and programs in federal and state exchanges, the offered plans meet federal standards for coverage and value but will not have lower price adjustment features for those who do not qualify by income standards.
Meeting the Insurance Mandate
The policy purchased by persons with incomes above 400 percent of the poverty line must meet or exceed the essential protections of the Affordable Care Act to avoid the coverage mandate penalty. Those ineligible for health insurance from healthcare.gov or a state exchange because of low income can qualify for CHIPs and Medicaid programs for adults and children.
Calculating Income for Obamacare
The income figure used to adjust income for the purposes of Obamacare benefits and subsidies is called the MAGI or modified adjusted gross income. The rules base eligibility for Obamacare subsidies on annual MAGI. The annual figure differs from other applications such as Medicaid or CHIPs which uses a monthly MAGI figure.
The Federal Poverty Guideline
The federal poverty guideline reference points in Obamacare are based in the law as passed by the Congress. The federal poverty line is the reference, but the law calculates it based on Census Bureau research. The federal poverty guideline is a flexible formula that takes local conditions into account. The guideline figures are the same for every state except Alaska and Hawaii. The poverty guidelines apply equally to the 48 contiguous states, and there are separate guides for Hawaii and Alaska.
The Most for the Money
The best value in Obamacare of other private insurance plans requires a thorough look at the terms and coverage offered. It includes the structure of the services and limitations on the use of outside network resources. The priority in the evaluation must be on the extent to which the plan meets the particular needs of the consumer. When calculating costs and out of pocket expenses, consumers must compare the expense of most needed services. A comparison weighted towards the needs of the consumer is a far more meaningful comparison than price or monthly premiums. Comparison shopping promotes comparisons and assessments keyed to the needs of the consumer. This is the opposite of most classifications that do not include the consumer’s particular needs. When considering whether Obamacare or some other type of healthcare plan is best, comparison shopping is an important tool. Start comparing health insurance rates now by entering your zip code in our FREE tool below!