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How much will I have to pay for health insurance in 2014?

By on February 19th, 2013
Filed: Facts, Health Insurance, Health Reform


How do Obamacare subsidies work?(See also, “Where can I buy a 2013 plan and keep it until the end of 2014?” and the free eBook Five Steps to Understanding Obamacare)

How much will your health insurance cost if you qualify for subsidies in 2014?

If you’ve followed the discussion around health reform, you probably know that most people who don’t have employer-based coverage will be required to buy their own coverage in 2014. You may also know that subsidies will be available to help some of them afford it.

What about you? Do you know if you’ll qualify for subsidies and, if so, how much you’ll pay for coverage next year?

Beginning in 2014, federal subsidies will be made available to individuals and families earning less than 400% of the federal poverty level ($45,960 per year for a single person, or $94,200 for a family of four, in 2013 dollars). Depending on your income, these subsidies will limit your health insurance premiums to between 2% and 9.5% of your income.

Here’s a chart describing how the subsidy range will work (FPL= Federal Poverty Level).

Your Income Your Insurance Costs in 2014
Up to 133% of FPL 2% of income
133-150% of FPL 3-4% of income
150-200% of FPL 4-6.3% of income
200-250% of FPL 6.3-8.05% of income
250-300% of FPL 8.05-9.5% of income
300-400% of FPL 9.5% of income

ACA limits on premiums by FPL

Now let’s look at a couple cost examples:

Example 1: Nancy Brown is a single woman earning $22,980 per year (approximately 200% of FPL). In 2014, she purchases a qualified health plan through her state exchange. The health plan she selects has a monthly premium of $400 per month. Thanks to the subsidies for which she qualifies, however, she will only pay a monthly premium of about $121 ($1,448 per year – that’s 6.3% of her income.). The federal subsidy covers the rest.

Example 2: The Smith family includes two parents and two children. Their annual household income is $83,000. In 2014 they purchase a qualified health plan through the state exchange or a state-licensed web-based entity. The plan they choose has a monthly premium of $1,200. Thanks to the subsidies for which the Jones family qualifies, they will pay a monthly premium of about $657 ($7,885 per year – that’s 9.5% of their household income). The federal subsidy covers the rest.

How do Obamacare subsidies work?

Penalties: If you opt not to buy health insurance and do not have employer-based coverage, you may face tax penalties. Tax penalties start small in 2014 and get larger over time:

  • 2014 tax penalty: $95 per adult and $47.50 per child (up to $285 per family), or 1% of annual income, whichever is greater.
  • 2015 tax penalty: $325 per adult and $162.50 per child (up to $975 per family), or 2% of annual income, whichever is greater.
  • 2016 and beyond tax penalty: $695 per adult and $347.50 per child (up to $2,085 per family), or 2.5% of annual income, whichever is greater.

Potential Tax Penalties

About Keith Mendonsa

As a Sales Officer in the individual and family department at eHealth Insurance, Keith Mendonsa has been featured on CNBC News in the Bay Area and his expert Health Care opinions have been quoted in several media publications. At the core, Keith is a family man, happily married with a rambunctious 2 year old son and another child on the way.

4 Comments Add Your Comment

kr on Tuesday, October 22 @ 6:25 am

Please comment on this scenario. I am 55, unemployed and I have no income. I have returned to school for worker retraining. I am living off of my savings. How am I suppose to afford this mandated health coverage. When I don’t opt in how are they going to fine me. They cant squeeze blood from a stone.

Nate Purpura on Wednesday, May 14 @ 3:19 pm

If you have no income you should qualify for Medicaid, which will cost you little or nothing at all.

Alice on Sunday, July 27 @ 4:03 pm

My husband and I are 62, We are retired, and our SS and husbands retirement will put us just over the poverty level amount for Obama Care.
We have checked with Blue Cross and the monthly cost for Ins. Is way to much for us. If we take the Out of Obama Care plan it is still very high and we can be drop if Blue Cross wants to drop us. (My husband has high blood pressure so it is possible to be dropped.) We have both worked our whole life and were excited to retire and enjoy life but with the health Ins. being so high it all seems well just not fare. When we see the news and see the problems with our boarders and think of all the people we will have to pay Ins. for but not have Ins. for ourselves. What if anything can we do? Do you have any answers that can help us?

iman on Saturday, February 14 @ 4:35 pm

We are family of four 2 parents and 2 boys(5&3) the mom and the 5years old boy are diabetic. We have been earn 50000 a year so we were with mass health benefits but now we started making 85000 a year, can we still have the mass health benefits or they will make us benefit from another health insurance company? And how much we will pay monthly?

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