Examples of Subsidized Premiums in the Exchange

A lot has been written lately about the premiums individuals can expect to pay for plans purchased in the new individual marketplaces being created by HHS and a number of states.

Set to go live October 1st, the marketplace has begun releasing plan design and rate information, and in general the news is good: while this certainly differs by area, it appears that many states will have a number of options for individuals to choose from, and the rates are coming in lower than expected.

Of course, we’ve known for a while that most people who purchase an exchange-based plan will qualify for a premium tax credit, and the amount they will pay for the benchmark plan (the second-lowest-priced silver-level plan in the exchange) is a function of their income, not of the total plan premium. Still, the lower-than-expected rates do mean that individuals will have some good options if they want to apply their government subsidy to another qualified plan, perhaps a cheaper bronze-level plan or a more expensive gold or platinum policy.

The Journal of the American Medical Association, in conjunction with the Kaiser Family Foundation, has created a great infographic to help illustrate what individuals and families will pay next year depending on their family size, household income, and age.

The infographic highlights three examples:

  • Two 40 year old non-smoking parents with two children earning $53,000 per year
  • Two retired 60 year old non-smokers with an income of $25,000 per year
  • A 30 year old smoker earning $30,000 per year.

Illustrations like this one can be beneficial when visiting with individuals who are unfamiliar with the new tax credits and are unsure how the ACA could benefit them and their families. When early retirees who may have had trouble finding affordable coverage in the past see that they could purchase coverage for $94 per month, that’s an easy sale.

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