FAQS on Obamacare Cost Assistance Subsidies

3 Cost assistance types:

  1. Premium Tax Credits – to lower premiums
  2. Cost Sharing Reduction Subsidies – to lower out of pocket costs
  3. Medicaid and CHIP

Some additional FAQ’s

  • Cost assistance subsidies are made available only in your states health insurance marketplace. Many health insurance brokers can help you outside the marketplace can help you enroll in a marketplace plan. Medicaid and CHIP are the exceptions since they may be obtained any time in the year and Medicare then has its own open enrollment period.
  • Subsidies are based on your income. For most states, anyone can get on Market plans some type of subsidy if making less than 400% of the FPL (Federal Poverty Level)
  • Each year the Federal Poverty Level will adjust for inflation, this allows an increased number of Americans who can then qualify for cost assistance.
  • There are less tax credits for people making below 400% of the FPL, cost sharing reductions are available for people making less than 250% of FPL on silver plans. Ins states that expanded Medicare and make less than 138% are eligible for Medicaid.
  • To determine subsidies is household income modified adjusted gross income or the MAGI; this figure is after most of the deductions have been taken out.
  • Qualifying for cost assistance, then a marketplace plan cannot exceed the cost over 9.5% of your current income. That is after any tax credits have been applied. So the lower the cap when you make less.
  • The amount of cost assistance available is based on your states Marketplace second lowest cost Silver plans.
  • For states that did not expand Medicaid many won’t qualify because they have fallen into the Medicaid gap, not qualifying for Medicaid or subsidies when making less than 100% FPL.
  • Silver Plans are the only plans where cost sharing reductions subsidies are made available.
  • To lower premiums tax credits may be applied in advance in part or in full or may be adjusted on federal income taxes.