usmbguest5318
Gold Member
Recently, I wrote a post to share what I discovered about how a few aspects of the AHCA [1] differently affect health insurance consumers' cash balances. As with that thread, this one results from my having finally become fed up with several things:
Now that "Bill" has calculated his subsidy amount, he can choose an insurance plan from the exchange. Bill can choose whatever plan he wants to choose -- the silver one used to determine his subsidy amount, some other silver one, a bronze (less expensive) one, etc. -- as befits his and his family's situation. No matter what plan he chooses, he'll receive a subsidy of $1,260. If Bill chooses the SLESP plan, his monthly payment will be something around $315.
Notes:
- I'm sick and tired of seeing/hearing people bitch and moan about the high premium costs of ACA purchased health insurance, and yet along with their complaining, they don't say thing about what their out of pocket costs are and what their income is. I ken private citizens' reluctance to disclose their income, but their not doing so makes it's all but impossible to discern whether the "plaintiff" is merely bellyaching or has a legit beef.
- Not being an O-care exchange purchaser of insurance, I got sick and tired of having no idea of just how much individuals of varying financial positions might have to pay out of pocket to buy insurance via the O-care exchange(s). I thus sought to find out.
- The consumers' income
- The premium charged for the second least expensive "silver" plan offered on the consumer's exchange (If there is only one silver plan offered, that one is necessarily the first, second, third, etc. cheapest one offered) The consumer doesn't have to purchase the second cheapest silver plan.
- The applicable federal poverty level (FPL) sum given the consumer's household size
Let's assume that "Bill," who is 40, married and has two children, earns/reports $60K in wages on his federal tax return as his adjusted gross income and has no other sources of income. Assume too that the annual premium for the second least expensive silver plan is $5,040. The FPL for bill is $24,600; therefore Bill earns ~243% of the FPL.
Under the ACA, then, the most Bill will be expected to pay out of pocket is 6.3% of his annual income. That means that Bill will have to pay out of pocket, aka Bill's "cap amount," is $3780 for the second least expensive silver plan (SLESP) available to him. As we said, that plan's premium is $5,040. The difference between the cost of the SLESP and Bill's cap amount is Bills ACA insurance subsidy, which is $1,260.
Under the ACA, then, the most Bill will be expected to pay out of pocket is 6.3% of his annual income. That means that Bill will have to pay out of pocket, aka Bill's "cap amount," is $3780 for the second least expensive silver plan (SLESP) available to him. As we said, that plan's premium is $5,040. The difference between the cost of the SLESP and Bill's cap amount is Bills ACA insurance subsidy, which is $1,260.
Now that "Bill" has calculated his subsidy amount, he can choose an insurance plan from the exchange. Bill can choose whatever plan he wants to choose -- the silver one used to determine his subsidy amount, some other silver one, a bronze (less expensive) one, etc. -- as befits his and his family's situation. No matter what plan he chooses, he'll receive a subsidy of $1,260. If Bill chooses the SLESP plan, his monthly payment will be something around $315.
Notes:
- "Dyslexically," in my earlier post, I called the AHCA "ACHA" for the whole post and never noticed my mistake...sorry about that.)
- You can find the