Obamacare FAQ: Are You Eligible for a Subsidy?

(Getty Images)

(Getty Images)

Editor’s note: For people buying on the individual market who want health insurance starting Jan. 1, the deadline to sign up is Monday, Dec. 23. State of Health is running one post a day with questions and answers on both the Affordable Care Act and Covered California until that deadline. This installment comes from KQED’s Obamacare Guide, written specifically for Californians.

I’ve Heard the Government Is Offering Subsidies to Buy Insurance. Tell Me More.

You may qualify for a subsidy — in the form of a tax credit — to help you pay for health insurance. Tax credits are available on a sliding scale, according to your income. More than 2 million Californians will qualify for a tax credit.

If you earn between 138 and 400 percent of poverty ($15,850 – $46,000 for an individual; $32,500 – $94,200 for a family of four), you may qualify for a federal tax credit. The credit will be applied to the cost of your premium. You choose when you want to receive the credit. You might want to receive it monthly, so that you will pay less each month, or you may elect to receive it all at once when you file your taxes in the following year.

In order to receive the subsidy, you must buy a plan through Covered California. You cannot apply the subsidy to a plan you find outside of the marketplace.

Covered California offers a calculator to help you estimate the cost of your insurance after the tax credit has been applied — and to help you compare the prices of the different plans available to you. The tax credit is based on your ability to pay for the second-lowest-cost silver plan. But you can apply the credit to any plan you wish to buy (except for a catastrophic plan).

I Can’t Even Afford the Copayment or Deductible. What Do I Do Now?

In addition to the tax credit, the federal government also offers special subsidies based on income and family size. If your income is less than about 2.5 times the poverty level — that’s $28,000 for an individual or about $58,000 for a family of four — you may be eligible. These subsidies can help reduce what you have to pay — called copayments — when you see the doctor or get other health care.

What If My Income Changes During the Year?

If your income changes, your subsidy amount may go up or down. You should contact Covered California right away to adjust the amount of subsidy you receive. If you estimate your income too low — and get a higher subsidy as a result — you could have to pay back some of the subsidy at tax time. Alternatively, if you estimate too high, you could get a refund.

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  • HEALTHY

    I have health insurance. I found out after age 25, when I’d been denied my health insurance claim ( was a PASSENGER in car accident in 1986 and MY private, self paid health insurance RESCINDED my policy and refused to PAY my hospital bills,) that insurance is NO guarantee of anything., THEN came along the HMOs offered at work. NO specialists…found out from DOCTOR relative, that the doctors received END of year bonuses based on the amount of REFERRALS they made to the specialists. The fewer the referrals, the MORE they got in their bonus check. My poor toddler was allergic to MOLD and needed an allergist, so she could receive SHOTS bi weekly, than enabled her to stop COUGHING constantly.

    At any rate, I HELPED a friend, apply for Covered California online, the second day it was up and running. The application abruptly ended, and it gave NO further instructions. IT said the person probably qualified for MEDI-Cal based on the income, assets. SEVEN (7) weeks later they received two identical letters from Covered California saying because their spouse “filed separately” they were not eligible for covered California . (There is no spouse, nor was that info on the application, had NOTHING to do with this person at all). Nine (9) weeks after applying ( NO phone calls ever get thru, just “try later”) they received a letter to bring in the ORIGINAL birth certificate ( they must mean a certified copy OR original) and a utility bill as a walk in to local office. On top of letterhead are about 19 DPSS offices in Riverside County. NOT one was checked. The phone number next to the caseworker’s name is NEVER answered, no calls returned OR the voice mail box is full. There is NO office to call. When I got the County Directory, that address is CPS/children’s adoptions in Riverside on Hole Street. I called Admin for Dpss ( I worked at DPSS for years ….decades ago for Riverside, County, CA) They called BACK ( couldn’t take a call, operators “busy”) and said to fax in the birth cert and bill. I said, great, what’s the fax number…then when I said they wanted ORIGINAL birth cert, they said NO no fax number, someone will “call you. IF we don’t contact them by today, the case is closed. I KNOW DPSS. NO where would take the birth cert..no LOCAL med-ical office. I know, I called them and DROVE to them. To cover my tail, I sent copies to the worker with return receipt required and letter explaining there was NO answer from her, EVER and NO office to walk these into. I guess they are RIGHT about this Obamacare, NOT well thought out…millions and millions went into educating public about applying. Ads, flyers, outreach. Why? ITs been clear. Call, or go online this date. But, when we do, we get NO calls going through, wrong letters back, NO offices to take verifications INTO…it’s a MESS. This person has not had health insurance for YEARS…and has had to rely on a few Urgent Care appointments for meds for high blood pressure, injuries etc.

    I pay HUGE< HUGE federal taxes, the highest bracket percent wise. I WANT people to have medical care because at the ER, they get it anyway, at 17 x the cost of preventative medicine, they suffer and I PAY IT ANYWAY< but at a high, huge price.

    I had AWESOME coverage thru PPO blue cross/blue shield but when they raised our rates to some 1300 per person/family, we changed to Anthem blue shield. I'm told that is one of the options under Covered California Medi-cal recipients. So, we all get the same doctors, hospitals, access to specialist and tests. I'm all for it. I know it takes 3 months to get an appointment in Banning/Beaumont at the local med facility NOW ..I know. When "everyone' is covered, they say appts will be impossible to get. Maybe they will open more medical clinics/offices? I don't know. I DO know that everyone should have medical care, as in the US they are gonna get it when it become life threatening, at the ER, on tax dollars. The hospitals write off thousands and charge cash payors a MINT and we PPOs/HMOs get special rates at the hospitals and labs.

    • Wind

      I have been unemployed since August 2013. Still looking for work. So I can only estimate my income based on how much I receive on unemployment. If unemployment gets extended, then I will receive a reduced amount through November 2014. My estimate based on my unemployment alone is around $16,000. So it is logical to use this number as my estimate and get subsidy. But then I could get a job in March and my income will go up. This means that I would have to pay back the subsidy for January and February? I am sure I can’t do that because I need the money to pay outstanding bills.

      • http://blogs.kqed.org/stateofhealth Lisa Aliferis, KQED

        Your eligibility for subsidy is based on your annual income. If your income changes (up or down) during 2014 you should immediately adjust your income estimate via coveredca.com. Your subsidy would be adjusted, monthly (if that’s the way you choose to receive it) going forward. Your annual salary/subsidy reconciliation will happen when you file your 2014 taxes.

      • Wind

        So if I found a job later, the subsidy will be adjusted. In addition, I would have to pay back the subsidy for the months that I was unemployed?