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Benefit Subsidies and Health Reform
healthsubsidy.net is wholly committed to helping you understand and maximize health subsidies that are available to you but there's another component which although separate, is very important to those that may qualify for a health subsidy. The Health Subsidy which we describe in detail offsets the cost of health insurance premium (the amount you pay each month to keep the policy in force). Benefit Subsidies is something entirely different but equally important for those that qualify. Let's understand how this works!
What exactly is the Benefit Subsidy?
Benefit Subsidies is exactly that...where health subsidies will offset your premium cost, benefit subsidies will offset your actual out of pocket for medical care itself. The ACA law stipulated that most people making under 400% of poverty would qualify for premium subsidies but they realized that even with insurance premium offsets, many people in the lowest margins (but higher than 150% of FPL who qualify for free Medicaid) would still have difficulties paying their out of pocket medical expenses. Even with a richer plan, the out of pocket maximum of $1000 (depending on plan, State, etc) would be hard for someone making 150% of poverty (roughly $16K annually). To compensate for this, they also devised benefit subsidies for people making between 150% and 250% of the Federal Poverty Level...the lower segment of range for those that qualify for the health subsidy. Let's see how this works.
What are the different levels of Benefit Subsidy?
First, there may be different interpretations of how to actually implement this benefit subsidy. For example in California, they just announced that there would be multiple Silver health plans based on income (150%-200%, 200-250%, and standard Silver). The 200-250% plan has richer benefits than the Standard Silver (say for someone making between 250% and 400%). The 150%-200% plan will have richer benefits still than the 200%-250% plan. The difference in benefits are significant at each level so this benefit subsidy means real money for those most in need. Other States and the Federal Exchange might have different takes as well although California is usually out front on these benefit changes. There has been talk about a benefit plan upgrade in some circles. For example, you might pay for a Silver plan but get Gold benefits between 150%-200% of poverty and pay for a Silver and get Platinum benefits between 200%-250% of the Federal Poverty Level. Our health plan with subsidy Quote page will show you all the plans you are eligible for with the subsidy calculation built right in if you are eligible. This is the best way to view actual rates and benefits applicable to your situation. The rates are scheduled to be available Oct 1st, 2013 and after.
Qualification for Benefit Subsidy
The qualification for the benefit offsets mentioned above will be based on a prior look-back period. For example, the taxes filed for 2011 are expected to be the basis for 2014 qualification. We're still awaiting rules on what happens if your income suddenly changes up or down (there's a lot of that following the Great Recession with hirings, firings, and changes in hours worked). The expected result is that offsets to either premium or benefits will be recouped at time time following that year (for example, April 2015 for 2014 subsidies). This might pose a hardship to those affected negatively (say with increasing income which pushes them to a higher subsidy band or to no subsidy at all) and we're still awaiting final rules on how this will work.
Los Angeles, Family of 4
making $60K. Subsidy=$8,388*
Iowa, Single Adult making $30K
*Based on age, expected costs, and other assumptions according to Kaiser Calculator. Actual subsidies will vary and official subsidy amounts will be available Oct 1st, 2013.
Health Subsidy Calculator
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