Whether you believe that ObamaCare was a mistake or a great boon to the uninsured it is now the “Law of the Land”. If you visit the Affordable Health Care (aka. ObamaCare) website HealthCare.gov you will find the opportunity to check out health insurance plans. They have plans for “Individuals and Families” and “Small Business Owners”.
After creating an account and finding a username that is acceptable (try using your email address without the “.com” at the end.) You will be sent an email that you must click to activate your account. Although they recommend using a “Gmail” account if you don’t have another account, it refused to verify properly for me when I first received the email but it worked fine for another email address. Another issue with the website is the big “get insurance” button at the top takes you to the very beginning once you have an account created you should click the small icon next to the “Logout” button instead.
The interesting thing about using the HealthCare.Gov site is that after you enter in all your individual information, although it offers you a variety of different health insurance plans it doesn’t tell you how much of a tax credit you are eligible to receive. A major component of the Patient Protection and Affordable Care Act (PPACA), commonly called the Affordable Care Act (ACA) or ObamaCare is the tax credit component… otherwise people who were interested in obtaining insurance would have already done so.
Health Care Subsidy Calculator
The health care subsidy calculator below will help you calculate the amount of tax credit you should be entitled to. And the best part is that this tax credit is available immediately rather than having to pay for your insurance first and then get the credit refunded to you when you file your tax return. Although it is theoretically a tax credit for you, this is a direct subsidy to the insurance companies so it doesn’t ever touch you (although you get the insurance benefit). The key to qualifying for the tax credit is that you have to apply through the HealthCare exchange. You won’t be able to get it if you apply directly to the insurance company, so it is also an obvious incentive to get your insurance through the exchange (which may be a reason for concern for those who fear Government intrusion but that is a topic for a different discussion).
Your Health Care Tax Credit
If your annual income is between 100% and 400% of the federal poverty level you might be eligible for the tax credit. For ObamaCare coverage for 2014 they use the Federal Poverty Levels for 2013 because that is what is in effect when the open enrollment begins. Federal Poverty Guidelines are based on location with three separate tables (48 Contiguous States plus DC), Alaska, and Hawaii. The other factor is household size so if you live in the continental United States and have a 1 person household the 100% poverty level is $11,490 and the 400% level is $45,960 so if you earn between these levels you will be eligible for the tax credit. But the amount you are expected to pay for insurance varies based on where you fall on the pay scale.
For instance, if you are at the 100% of poverty level the most you are expected to pay out of your salary for health insurance is 2%. So if you earn $11,500 and have a 1 person household, are a non-smoker in Virginia you might be offered a Silver plan for $2,376 per year but then be offered $2,146 in tax credits so your net cost for insurance would be $230 per year or $19.17 per month, but you could opt for the Bronze plan and pay nothing for insurance.
However, if you earn 400% or more of the poverty level i.e. $45,960 or more, your maximum is 9.5% of your income and your insurance would cost the same $2,376 per year or $198/month, but you would not be eligible for any tax credit. Of course, the tax credit scales for income levels in between.
The other factor that affects your poverty level calculation is the number of people in your family. So if you have four members of your household and you make $35,325 you are at 150% of the poverty level (100% for a family of 4 is $23,550) while a family of 7 can make $35,610 and still only be at the 100% level.
To calculate your personal Obama health Care tax credit and estimated insurance cost through the healthcare exchange use the tax credit calculator below.
- The Economic Ramifications of the Affordable Care Act (Obamacare)
- Federal Poverty Levels
- Health Insurance Inflation
- The Impact of Inflation on Retirement Planning
- Healthcare Is Killing America
Image courtesy of adamr / FreeDigitalPhotos.net
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