Subsidies for Millions with Obamacare

by | Published on May 8, 2013 | Healthcare News

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The latest reports from CNN IBN highlight that Affordable Care Act or Obamacare will provide health insurance subsidies to millions of Americans next year. The report is based on the analysis carried out by a consumer advocacy group named Families USA. According to them, about 26 million citizens are eligible for Obamacare subsidies. Most of these individuals will be from working families with an annual income between $47,100 and $94,200. Young adults in the age range 18 – 34 will comprise more than a third of the eligible group.

Now, let us take a look at the Affordable Care Act. As per this act, tax credits are allowed for low and middle income consumers who purchase health coverage through insurance exchanges run by the state. Even though the enrollment will start in October, the coverage for insurance plans offered through state-run-exchanges will begin only in January. Those who want to buy individual plans can choose from four coverage levels namely Platinum, Gold, Silver and Bronze. The premiums and expenses for these levels will be different from each other.


The federal subsidies will be attached to the cost of the corresponding insurance plan depending on the place where consumers live. Insurers will soon submit to the government details of their plans and premium costs to be offered in exchanges. The details will be revealed to the consumers during the enrollment in October. The estimation of Family USA is that if a family of four earns $94,200 and purchases a ‘Silver’ plan carrying $12,500 annual premium, then they can get a subsidy of $3,550. As a result, the cost of premium will be limited to 9.5% of the family income.

People who do not have government health insurance (Medicaid or Medicare) or an affordable insurance plan may get help for paying their premiums according to this act. But, such kind of assistance is given for those having income up to four times the federal poverty level. Also, the subsidies for insurance plans will be paid directly to the relevant insurance company.

The Congress Budget Office estimates that about 6 million citizens will be able to claim subsidized coverage with an exchange next year. They also expect that it will grow to around 22 million by 2017. The government holds it mandatory for all Americans to carry health insurance as on January 1, 2014. Those who fail to do so will have to face financial penalties. It is predicted that uninsured people may prefer to pay the fines if coverage through the state exchanges turns out to be confusing or expensive. If fewer healthy individuals decide to enroll, the coverage will prove to be more expensive for everyone, especially in the light of the fact that most of the enrollees will then be individuals with greater medical necessities.

Meghann Drella

Meghann Drella possesses a profound understanding of ICD-10-CM and CPT requirements and procedures, actively participating in continuing education to stay abreast of any industry changes.

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