If you’ve been following the news about this year’s Affordable Care Act (ACA) open enrollment, you’ve heard everything from “Premiums are skyrocketing” to “You may be eligible for health insurance with a zero premium.”
Both statements are correct. But to figure out what your cost will be and whether you qualify for the subsidies that will lower your tab, you’ll have to shop around. “There is a lot of confusion out there,’” says Karen Pollitz, senior fellow at the nonpartisan Kaiser Family Foundation.
If you are one of the more than 10 million people who get insurance through the ACA Health Insurance Marketplace or you plan to buy an ACA plan for the first time, here’s what you need to know before you log on to healthcare.gov:
Are you eligible for an ACA subsidy? The law provides consumers with two kinds of subsidies; whether you qualify for them — and how much they will be — depends on your income.
- If you earn between 100 percent and 400 percent of the federal poverty threshold, you may be eligible for a subsidy to help defray the cost of your monthly premium. The income range is $12,060 to $48,240 for an individual and $24,600 to $98,400 for a family of four.
- The amount of the subsidy will depend on your income, age and number of people in the family. For example, a couple ages 53 and 55 whose annual household income totals $45,000 would be eligible for a $1,270-per-month subsidy, according to a Kaiser Family Foundation calculator. You can find out if you qualify for a subsidy by going to healthcare.gov and following the step-by-step process. If you are eligible, you can choose to use the subsidy to lower your premium or you can pay the full premium and deduct the subsidy on your federal income tax form.
Note: Under the ACA, the subsidies increase in tandem with premiums. That means if you are eligible for a premium subsidy, you likely won’t be affected by the increases in premiums.
- These subsidies help pay for out-of-pocket medical expenses such as deductibles and copays. Consumers may qualify for a cost-sharing subsidy in addition to a premium subsidy.
- If you earn between 100 percent and 250 percent of the federal poverty threshold, you may be eligible for this subsidy. The income range is $12,060 to $30,150 for an individual and $24,600 and $61,500 for a family of four.
- When you provide your income and household size at healthcare.gov, it will also tell you whether you qualify for a cost-sharing subsidy. If you are eligible, you will have a lower deductible and a lower copay.
Note: Unlike the premium subsidy, which can be used for any marketplace plan, you can get a cost-sharing subsidy only when you enroll in a “silver” plan (see below for a description of the plan categories).
The ACA plans fall into four categories:
- Bronze: These plans have the lowest monthly premiums but also carry high deductibles (typically more than $6,000), high copays and other out-of-pocket costs. Bronze plans tend to appeal to younger people who don’t expect to have steep medical bills.
Note: These are plans that you may be able to get for a zero premium. That’s only if you qualify for a subsidy that covers the entire bronze plan monthly cost.
- Silver. These are the most popular plans. They feature moderate premiums and moderate out-of-pocket costs with lower deductibles than the bronze plans.
Note: If you qualify for the cost-sharing subsidy that helps pay your out-of-pocket costs, you must select a silver plan.
- Gold. These plans carry high premiums and feature low deductibles and low out-of-pocket costs.
Note: Because of a quirk in the way insurers have distributed premium increases for 2018, consumers who have a silver plan in 2017 may be able to get a gold plan for the same — or lower — monthly premium next year.
- Platinum. These plans have the highest monthly premiums, very low deductibles and lower out-of-pocket costs.
The bottom line, experts say, is that between now and Dec. 15, consumers need to do their homework to make sure they enroll in a plan that meets their health needs and their pocketbooks.
“Some people just stay with the plan they’re in,” says Gary Claxton, a Kaiser Family Foundation vice president and director of its Health Care Marketplace Project. They should resist that inclination this year, he says. They should do some comparison shopping and find out if they are eligible for a federal subsidy.
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