Q & A

The second open enrollment is underway and people who did not purchase health insurance from the exchanges last time have another opportunity for affordable, quality health insurance coverage. However amid rumors, deadlines and peer pressure, you might be struggling to make sense of all the aspects of the law, especially the subsidies which deliver the primary advantages of Obamacare.

You probably have heard of Obamacare subsidies, premium tax credits and other connected endeavors under ACA that can make health insurance affordable for you. But how do you find out what do you qualify for and how can you use it? Here are six common questions and answers that can help you understand and apply for affordable coverage under ACA.

Q1. What is the difference between Premium Tax Credits and Cost Sharing Subsidies?

Premium tax credits are designed to reduce the burden of health insurance premiums on individuals and families. Under Affordable Care Act, the cost of health insurance is capped at 9.56 percent of your annual household income. These premium tax credits help people cover the remaining cost.

Cost sharing subsidies primarily concentrate on copay and deductibles. These subsidies cover the out of pocket expenses a family might have for availed medical services or care.

Q2. How do I know if I qualify for premium tax credits?

If your annual household income lies between 100 percent and 400 percent of the federal poverty level, you are eligible for premium tax credits. As per the income statistics for 2015, an individual should have income between $11,670 and $46,680 for being eligible for premium tax credits. For a family of 6, the same is between $40,090 and $127,880.

The amount of premium tax credits depends upon how much you earn, with lower income groups generally getting higher premium tax credits. You can also opt for a monthly reimbursement through premium tax credits instead of annual reimbursement when you file your tax return.

Q3. How do I know if I qualify for cost sharing subsidies?

For availing cost sharing subsidies, you have to have a Silver plan under the available plans. As per the rule, cost sharing subsidies are only available to individuals and families earning between 100 percent and 250 percent of the federal poverty level. So, if you are family with 4 members, you are eligible for these subsidies if your household income is between $23,850 and $59,625.

Again, as a rule, people with lower incomes will receive more subsidies, and these subsidies will kick in as and when you use your health insurance at the doctor’s office or the hospital.

Q4. How do I know if I qualify for Medicaid?

Checking if you qualify for Medicaid is a little trickier than usual. The Obama administration had planned to expand Medicaid under the program, but a Supreme Court ruling allowed states to choose if they wanted to go with Medicaid expansion by making it optional. Now, 28 states have expanded Medicaid while 19 have decided not to expand. 4 states still haven’t decided if they want to expand Medicaid. Depending on your state’s status, you can determine if you are eligible for Medicaid.

Q5. Can I check the exact amount of help I will receive, including Medicaid status, without signing up?

The federal and state marketplaces allow you to determine eligibility for all financial help, check health insurance plans, and check Medicaid eligibility without requiring you to signing up and providing your contact information. You can check the same through some other online tools too, but it is recommended you use the official healthcare.gov website.

You just need to enter your ZIP code, family size, and approximate 2015 income on the healthcare.gov website for receiving a consolidated report that shows the amount of subsidies available, status on Medicaid coverage, etc. You can then proceed to browsing plans on the website, checking their actual and post-subsidy cost, and purchasing a health plan. You would only be required to sign-up when you have to go through with a purchase.

Q6. Any last minute advice or precautionary measure?

The most important piece of advice is that unless you are exempted, you will be penalized for not having health insurance in 2015. Therefore, it is essential that you get health insurance in this second open enrollment period. While purchasing health insurance, you would be required to mention your estimated household income in 2015. Take absolute care while estimating this number as this influences your eligibility for tax subsidies. In case you miscalculate and end up receiving more subsidies than you are eligible for, you will have to pay them back when you file taxes at the end of the year.

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