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How do you get a subsidy for health insurance?

The lowdown...
  • The Marketplace and state exchange staffs guide applicants through the subsidy process
  • The Obamacare subsidies can significantly reduce the costs of health insurance
  • The law bases the subsidies on annual family income
  • Those earning less than 400 percent of the federal poverty level can get some level of subsidy or financial assistance

The Obamacare subsidies help make insurance more affordable for millions of subscribers. It begins with available premium tax credits to lower the monthly premium costs, and it continues with adjustments to the costs of out-of-pocket expenses. The operation of the system is automatic and based on information provided by the applicant. The standards involve benchmarks. The second lowest silver plan is a benchmark for tax credits. If the amount one would pay exceeds the cap, then the system awards a subsidy.

There may not be agreement with the decisions, and state exchanges can vary standards for such items as Medicaid eligibility. Comparison shopping is an excellent choice for those seeking to find the best balance of price, value, and use of subsidies.

Enter your zip code to find the best health insurance policies in your state!

The Open Enrollment Period

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The subsidies must come through the Marketplace and state exchanges. Purchasing a qualified plan outside of the open enrollment will not get subsidies. The open enrollment period for the 2017 calendar year began on November 1, 2016, and ended on January 31, 2017. The importance of the open enrollment for subsidies cannot be overstated. There can be no subsidies without the authorization of the Marketplace or state exchange.

Issuing the Subsidies

The Obamacare Marketplace and the state exchanges have exclusive power to issue the Obamacare subsidies. The below-listed items describe the Obamacare subsidies available subject to qualifying incomes.

Other Forms of Subsidized Healthcare

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Obamacare was designed to promote insurance coverage. It had impacts among those without means to pay as well as those that qualified on the basis of Family Annual income.

Those with incomes near or above the 400 percent of the federal poverty level should shop outside of the Marketplace for the best values. They will get little value from Marketplace subsidies. The below-itemized programs provided needed insurance subsidies to those that lacked funds to pay for coverage on the Obamacare marketplace.

  • Medicaid expansion raised the limits for millions to qualify for health insurance coverage through Medicaid.
  • The CHIP is a program that protects children that lack regular medical care during the critical formative years. Children’s Health Insurance Program is a joint undertaking between the federal government and the respective state agencies that fund medical care for low-income citizens and residents.
  • Prevention and wellness services came with no additional charges in the Affordable Care Act. These critically needed services hold the potential to reduce the national costs of health care substantially. These prevention services include tests, examinations, screenings, and technical services like laboratory work. They can detect early treatable stages of severe disease and illness.

How do Premium Tax Credits Work?

Everyone earning between 100 percent and 400 percent of the federal poverty level can get tax credits. Taxpayers can collect them or adjust their tax bill with them when they file their returns.

The premium tax credits put a cap on the monthly premium to be paid for monthly health insurance premiums. They cap the monthly amount at between two percent and nine and one-half percent of the annual family income. The below-described steps put the tax credits in motion to work for the policyholder.

  • Financing the Monthly Premium – The policyholder can send the tax credits to the insurer on a monthly basis to reduce the amount that they must pay out of pocket.
  • Use All or Part – The policyholder can use all or part of the available tax credits and adjust the balance when filing a return.
  • Low Income Gets a High Rate – The highest rates of tax credit participation go with the lower income ranges.

The Individual Mandate

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The individual mandate requires every eligible person to get and keep qualified health insurance coverage. Everyone has a right to buy qualified health coverage during the open enrollment periods. Subsidies can only go to those qualified to get them. Most qualifications for subsidies proceed from an analysis of the family annual income. Other factors include the type of Obamacare plan the applicant selects.

When comparison shopping for Obamacare plans, it may be helpful to look at the effect of subsidies on premiums, out-of-pocket costs, and costs sharing.

Special Enrollment Period

When an applicant experiences a qualifying life event, that can get a fresh 60-day period to select a health insurance policy from the Marketplace or a state exchange. Because applicants purchase through the exchanges or Marketplace, they can get the financial assistance and subsidies for which they qualify on the basis of annual family income. The below-listed items describe qualifying events accepted by the states and the federal Marketplace.

The Qualifying Life Events

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The federal and state government agencies include the below-listed items as qualifying events for a special enrollment period. These are changes in status that require a fresh opportunity to get qualified health insurance coverage. The applicants also get a fresh start with the Marketplace and exchange subsidy programs.

  • Childbirth
  • Marriage or Divorce
  • Child adoption
  • Moving to a new address

The Silver Plan and Special Subsidies

The silver plan is a benchmark in the metal tier system. The come in a variety of forms and deductible levels. The government has set aside some silver plans for use with Health Savings Accounts.

These special High Deductible Health Plans meet the IRS test for minimum deductions and maximum contributions of pre-tax dollars. The addition of a Health Savings Account can change the dynamic of health insurance.

The Health Savings Account provides funds to pay expenses. It also creates a savings asset using pre-tax dollars. Unused funds can roll over onto following years.

Appeals of the Marketplace Decisions

There is a robust process for appeals . The applicant can appeal the database for the decisions as well as the process used to come to the disputed outcome. The appeals process must be quick in order to be an effective remedy for a decision that can have a dramatic effect on an individual or family.

How to get a Health Insurance Subsidy

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If qualified, one can get a health insurance subsidy by applying for health insurance on the Obamacare Marketplace or a state exchange. The standards apply to all applicants, and it is important to present accurate financial information on annual and adjusted annual income.

The Marketplace analyzes applicant data and sorts them into the categories that can yield the best result for tax credits, cost-sharing reduction, and prevention services. The proven method for finding high-value policies, comparison shopping will help find the best value and features that meet the needs of the individual or family situation.

Don’t forget to compare your current policy with your state’s top providers’ offerings for free with the zip code tool below!

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