2016 vs. 2017 Obamacare Health Insurance Subsidies and Tax Credits

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Despite ObamaCare, formally known as the Affordable Care Act, having been around for several years now there is still considerable uncertainty around the various tax credits and subsidies on premiums, deductibles, co-payments, and coinsurance. The value of these credits and subsidies are generally dependent on your modified adjusted gross income (MAGI) and family size and can significantly impact and alleviate your insurance costs in the year ahead. Two of the main assistance and subsidy programs are discussed below.


Premium Assistance Subsidies

The subsidy to lower monthly premium obligations is available for households whose income is 400 percent below the federal poverty level. The subsidy was created to ensure households do not spend more than a certain percent of their income on their mandatory health insurance coverage obligation. The table below shows the maximum (400%) income level to qualify for the premium assistance subsidy. The subsidy amount is based on a sliding scale (the lower your income, the more you get) and you’ll the see the actual amount/savings you are eligible for when you purchase your health plan via the marketplace.  

# Persons in Household2015 - 100% FPL income threshold2015 - 400% FPL income threshold2016 - 100% FPL income threshold2016 - 400% FPL income threshold
1$11,770$47,080$11,880$47,520
2$15,930$63,720$16,020$64,080
3$20,090$80,360$20,160$80,640
4$24,250$97,000$24,300$97,200
5$28,410$113,640$28,440$113,760
6$32,570$130,280$32,580$130,320
7$36,730$146,920$36,730$146,920
840,890$163,56040,890$163,560
9+add $4,160 for each additional person.add $16,640 for each additional person.add $4,160 for each additional personadd $16,640 for each additional person

The premium assistance subsidies will be paid in the form of tax credits that can be deducted from what is owed in federal taxes, depending on how much is spent on health insurance. Your current year subsidy is based on the prior years income level. A monthly option to claim this subsidy is also in the works.

Out-of-Pocket Costs Assistance

Out-of-pocket costs are expenses for medical care that aren’t reimbursed by insurance and include deductibles, coinsurance, and co-payments. The government provided cost-sharing assistance program will limit out-of-pocket-costs based on income and family size. Health insurance companies offering coverage through the Marketplace must lower the amount you pay out of pocket for essential health benefits if your household income is generally between 100% to 250% of the federal poverty level.

When you apply for coverage in the Marketplace, you’ll learn if you’re eligible for these savings on out-of-pocket costs. Of the more than 11 million people who had in-force ObamaCare coverage, almost 85 percent were receiving some form of premium or out-of-pocket subsidies.

According to the official affordable care site, plans in the Marketplace are separated into 4 different categories: Bronze, Silver, Gold, and Platinum. These categories are based on how much of your medical costs you pay and how much the plan pays when you get medical care. They are not based on plan quality. If you qualify for out-of-pocket savings, you must choose a Silver plan to get the savings. In some cases, having a Silver plan will be like getting the cost-saving benefits of a Gold or Platinum plan for a Silver price. You can choose any category of plan, but you’ll get the out-of-pocket savings only if you enroll in a Silver plan.


Because the subsidies and cost sharing assistance programs are based on income it is important to double check you expected income. If the amount of your expected income you report isn’t accurate, you may not get the right amount of savings. If you wind up making more money than you predicted on your application, you could have to pay back some or all of the savings you’ve received. You would do this on your next tax return.

I will discuss other assistance programs and marketplace plans in upcoming posts and encourage you to subscribe (free) via Email or RSS to get the latest articles.

{ 4 comments… read them below or add one }

Gloria Gibbons November 7

This ACA or rather ObamaCare is the biggest crock of sh*t I have ever seen in my life. This is across the board insurance. In other words you are paying for every person who is on it that has medical expenses. No help for the single taxpayer. As a single independent person, who has worked all their life, raised a child and put my self through college, but has psoriasis and psoriatic arthritis there is no help. SO here it is in a nutshell. I have chronic plague psoriasis, and severe psoriatic arthritis, but by law I have to have insurance, “Mandate” so as to pay for every one else, even though I can’t pay for my medicine, $800.00 co-pay, I can pay for every one else to get medical attention. Oh and wait a minute, can’t get any help, because guess what I have “Obamacare,” an insurance that my dermatologist doesn’t even take, and if you have health insurance there is no help. Can’t call the Healthcare Market place, them people don’t know if it’s day or night , believe me I have talked to them before. Not even on your taxes can you get help, as the IRS fined me $900.00 last year, said I got to much subsidy even though some one from the market place, told me how much subsidy I would get and how much my premiums would be. I thought our so called president may help, but it appears the Democrats maybe right, he is just out to help the rich!

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Fran December 14

My understanding is that premium subsidies are available for all the “metal” plans – bronze, silver, gold, platinum (not catastrophic), but out of pocket assistance applies to silver only. Is that your understanding? I live in PA.

What do you mean by a verification plan for taxpayer subsidies?

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TED H September 19

WHAT HAPPENS TO A PERSON THAT HAS A JOB PAYING LESS THAN $15,000 PER YEAR AND HAS A CRONIC ILLNESS (CROHNS) THAT REQUIRES MEDICATION AND DOCTORS TREATMENTS COUPLED WITH ASTHMA.
IF THIS PERSON IS REQUIRED TO BUY “OBAMACARE”, THEN HOW WILL THEY GET HELP IN PURCHASING THEIR MEDICATION. BECAUSE “OBAMACARE” WOULD DISQUALIFY THEM FROM THE PROGRAMS THAT PROVIDE MEDICINES TO PEOPLE THAT NOW HAVE NO INSURANCE.

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Jenny July 7

Verification plans for the taxpayer subsidies won’t go into effect until 2015 for those earning about $45,000 to purchase health insurance, or earning $15,000 to qualify for Medicaid in the District and 23 participating states.

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