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The Affordable Care Act created an income-based federal subsidy program for people who buy their own health insurance. In every state, federal premium tax credits (premium subsidies) are available to reduce the amount that most enrollees pay for their coverage, and cost-sharing reductions are available to limit out-of-pocket costs for lower income enrollees.
But several states have created additional state-funded subsidy programs that make coverage and/or medical care even more affordable than it would be with the federal subsidies alone. Eligibility for these programs varies by state, as does the scope of the available subsidies.
Which states provide health insurance subsidies?
Nine states have state-funded subsidies available in addition to federal subsidies, with specifics that vary from one state to another:
- California: For each person enrolled in exchange coverage, the state pays $1/month in premiums. But as of 2024, California will have a greatly enhanced state-funded subsidy program that will significantly reduce out-of-pocket costs for Silver-plan enrollees with household incomes up to 250% of the poverty level. Under the new program, deductibles will be eliminated for these enrollees and other out-of-pocket costs will be reduced, utilizing funding generated by California’s individual mandate penalty. (California had a fairly comprehensive premium subsidy program in 2020, but discontinued it once the American Rescue Plan’s federal subsidy enhancements became available.)
- Colorado: Additional cost-sharing reductions are available to adults with income between 150% and 200% of the federal poverty level (FPL), as long as they select a Silver plan through the exchange. And as of 2024, this benefit will be extended to 250% of FPL. At that point, anyone with CSR benefits in Colorado will receive the highest CSR level (94% actuarial value). Colorado also established a new platform that undocumented immigrants can use to enroll in coverage, with state-funded premium subsidies for up to 10,000 people with income up to 300% FPL. (For 2023 coverage, maximum enrollment in that program was reached by early December 2022, so additional enrollments for 2023 are at full price.)
- Connecticut: Additional premium subsidies and cost-sharing reductions are available to adults with income up to 175% of FPL, as long as they select a Silver plan through the exchange. The state subsidies then pay all of the remaining premiums and cost-sharing that are left after the federal subsidies are applied.
- Maryland: Young adults, aged 18-37, with income up to 400% of FPL are eligible for additional premium subsidies. This had been scheduled to sunset at the end of 2023, but additional legislation (SB601 and HB814) has extended that through 2025. In 2022 and 2023, the program was available to adults age 18-34, but the age limit has now been extended to 37.
- New Jersey: Enrollees with incomes up to 600% of FPL are eligible for state-based premium subsidies. The subsidy amount varies from $20/month to $100/month for an individual, and twice that much for a family.
- New Mexico: Enrollees with incomes up to 400% of FPL are eligible for state-funded premium subsidies. Enrollees with incomes up to 300% of FPL are eligible for additional cost-sharing reductions (state out-of-pocket assistance, or SOPA). These SOPA benefits are being expanded for 2024 so that people with household income up to 300% of the poverty level can get plans with 90% actuarial value (ie, platinum-level coverage). Plans with cost-sharing reductions in New Mexico are labeled “turquoise.”
- Massachusetts: Enrollees with incomes up to 300% of FPL are eligible for state premium subsidies and cost-sharing reductions. The income limit is increasing to 500% of the poverty level as of January 2024, so the new eligibility rules are in effect for the open enrollment period in the fall of 2023. (This program is called ConnectorCare.)
- Vermont: Enrollees with incomes up to 300% of FPL are eligible for state-funded premium subsidies and cost-sharing reductions.
- Washington: State-based premium subsidies (Cascade Care Savings) are available for enrollees with income up to 250% of FPL, as long as they select a standardized Silver or Gold plan through the exchange. As of November 2023 (for coverage effective in 2024), undocumented immigrants can enroll in coverage through Washington Healthplanfinder and qualify for Cascade Care Savings based on household income. (Note that in 2022 and 2023, Washington also offered a state-funded subsidy for employees of childcare facilities who earned up to 300% of the poverty level, as long as they weren’t eligible for Medicare, Medicaid, or affordable employer-sponsored insurance. This program was funded by the state through the end of 2023.)
Which states provide other types of non-subsidy assistance with health coverage?
In addition to the state-funded premium subsidy and cost-sharing subsidy programs described above, some states use other approaches to make affordable health coverage more accessible for their residents:
- Two states (New York and Minnesota) have Basic Health Programs (BHPs), and Oregon plans to have a BHP by mid-2024. BHPs are not the same as additional state-funded subsidies, but they provide very comprehensive health coverage, with free or very low premiums, to residents with income up to 200% of FPL. (New York has been seeking federal permission to expand BHP eligibility to 250% of the poverty level, but paused this as of late September 2023.) Massachusetts’ ConnectorCare – serving enrollees with income up to 500% of FPL as of 2024 – looks much like a BHP, with standardized plans that have $0 deductibles and low out-of-pocket costs.
- Washington, DC provides Medicaid to adults with income up to 215% of FPL, which is well above the 138% limit that’s used in most states.
How can I tell if I'm eligible for state-funded health insurance subsidies?
Just like federal subsidies, eligibility for state-funded subsidies is typically based on how your household income compares with the federal poverty level. For 2024 coverage, states use 2023 federal poverty level numbers. As noted above, the eligibility limits differ from one state to another, but this chart is a good reference that shows the incomes that correlate with various percentages of the 2023 poverty level, depending on family size.
In order to get federal cost-sharing reductions, you have to select a Silver plan, and that’s also true of the state-funded cost-sharing reductions. In most cases, state-funded premium subsidies can be used for plans at any metal level, although that’s not always the case. (For example, Connecticut’s program only applies to Silver-level plans, and it subsidizes both premiums and cost-sharing.)
If my state offers state-funded health insurance subsidies, can I also get federal ACA subsidies?
Yes, if you’re eligible for federal subsidies you’ll receive them in addition to the state-funded subsidies. The state-based subsidies described above are designed to work in conjunction with the ACA’s federal subsidies. They provide additional benefits, resulting in lower premiums and/or lower cost-sharing amounts than you would have with just the federal subsidies.
But states can design their subsidy programs so that they can be used even by people who aren’t eligible for federal subsidies. Examples are the Colorado and Washington programs that provide state-funded premium subsidies to undocumented immigrants, who are not eligible to receive federal subsidies at all.
Where can I get state-funded health insurance subsidies?
The states that provide state-funded subsidies all run their own exchange/marketplace platforms. If you’re in a state that offers state-funded health insurance subsidies, you’ll need to obtain your health coverage through the exchange in order to take advantage of the subsidies.
This is true for both state and federal subsidies, as subsidies are not available for off-exchange plans. (One caveat: Colorado uses a separate platform to provide state-subsidized coverage to a limited number of people who are undocumented immigrants and are thus not eligible to use the exchange.)
Will more states start to offer state-funded health insurance subsidies?
It’s quite possible that other states may start to offer state-funded health insurance subsidies. Most of the states listed above have debuted their plans in just the last few years, and others might join them. For example, Minnesota considered legislation in 2023 that would have created state-funded subsidies as of 2024, although it did not advance in the 2023 session.
But in general, a state needs to run its own exchange in order to provide state-funded subsidies, since the federally run HealthCare.gov platform isn’t set up to calculate additional subsidies beyond those provided by the federal government. There are a total of 19 state-run exchanges as of the 2024 plan year, although that number is expected to increase over time (Georgia will have a state-run exchange platform by the fall of 2024).
How much could I save on health insurance with state subsidies?
The savings from state-funded health insurance subsidies vary considerably from one state to another, but subsidies can run the gamut from zero-cost coverage and care (for example, Connecticut’s program for low-income enrollees) to shaving a small amount off the monthly premiums that a person has to pay (for example, New Mexico’s program that subsidizes enrollees with income above 300% of FPL, and California’s program that provides just $1/month to offset premiums; note that California will have a very robust state-funded cost-sharing reduction program in place as of 2024).
In most cases, the exact amount of the savings will vary depending on your income, age, and location. In each of the states that have their own subsidy programs, you can use the state-run exchange’s plan comparison tool to get an anonymous price quote that will include any available state-funded subsidies as well as federal subsidies.
Can I use a state subsidy to pay for marketplace coverage?
Yes, if you’re in a state that offers state-funded subsidies and you meet the eligibility guidelines. As described above, each state that offers these subsidies has its own rules in terms of income limits and whether the subsidies apply to all marketplace/exchange plans or only certain plans. (For example, Washington’s state-funded subsidies are only available to offset costs for people who select standardized Silver or Gold plans).
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.