Will you receive a premium subsidy? How do they work?
- The subsidies are tax credits — but you don’t have to wait until tax season
- Subsidy availability hasn’t changed, despite the efforts to repeal the ACA
- The subsidies are larger than ever, and will be even bigger in 2019
- Average subsidy-eligible enrollees get most of their premiums covered
- Premium subsidies don’t apply to supplemental coverage
- Cost-sharing reductions are a different type of ACA subsidy
Obamacare subsidy calculator
This tool provides estimates before you review available plans.
This calculator is not currently valid for Massachusetts.
If you’re worried about the cost of health insurance premiums in the exchanges, it might help to know that – thanks to the law’s generous subsidies — your premiums could end up a lot lower than you expect.
More than half of the uninsured don’t know that financial assistance in the form of subsidies is available in the exchanges. A few more quick facts about Obamacare subsidies:
- The subsidies are tax credits, which means you can opt to pay full price for your coverage (purchased through the exchange) each month, and then get your tax credit when you file your tax return. But unlike other tax credits, the subsidies can be taken throughout the year, paid directly to your health insurer to offset the cost of your coverage.
- The subsidies are still available. The GOP spent much of 2017 trying to repeal the ACA, but were unsuccessful (with the exception of the repeal of the individual mandate penalty as part of the GOP tax bill that was enacted in December 2017; people who are uninsured in 2019 will not be penalized unless they’re in a state that has its own mandate).
- One thing that has changed, however, is the size of premium subsidies. Premium subsidies are larger than they used to be, due to the way the cost of cost-sharing reductions (CSR) was added to premiums. In most states, subsidies are significantly larger for 2018 than they were in 2017, resulting in millions of people having access to free bronze plans, and/or gold plans that are significantly less expensive than they were the year before. This will continue to be the case in 2019, but the disproportionately large premium subsidies will be even more widespread (for example, Colorado, North Dakota, and Vermont did not allow insurers to add the cost of CSR to silver plan rates for 2018, but are doing so for 2019. This will result in higher silver plan premiums, and correspondingly larger premium subsidies).
- The subsidies cover the majority of the premiums for people who are subsidy-eligible. Of the people who enrolled for 2018 through HealthCare.gov, subsidies covered an average of 86 percent of their premium costs. The average after-subsidy premium paid by the millions of enrollees who qualified for premium subsidies in 2018 through Healthcare.gov was only $89/month.
- Premium subsidies don’t apply to supplemental coverage, including accident supplements, adult dental/visions plans (or pediatric dental/vision plans that are sold separately from metal coverage, as opposed to being embedded in the medical plan), critical illness plans, or stand-alone prescription drug insurance (but there are free prescription drug discount plans available).
- Subsidies can lower your premium significantly, but the ACA also provides subsidies that can reduce your cost sharing. And even though the Trump Administration stopped reimbursing insurers for the cost of those cost-sharing subsidies, the benefits are still available to eligible enrollees (54 percent of the people who signed up for 2018 plans through the exchanges nationwide are receiving cost-sharing subsidies). The workaround that states and insurers developed to account for the lack of federal funding is what’s driving the larger premium subsidies described above.
It pays to calculate your subsidy!