Covered California Subsidy Calculator

Covered California Subsidy Calculator

Estimate your potential monthly health insurance subsidy through Covered California. This calculator uses your household income, household size, and an estimated benchmark plan cost to determine your eligibility for financial assistance, based on Federal Poverty Level (FPL) guidelines and the Affordable Care Act (ACA) premium tax credits (APTCs).

This is the estimated monthly cost of the second-lowest-cost Silver plan in your area for your age group. You can find this on the Covered California website when browsing plans. If unsure, use an average estimate (e.g., $400-$700 per person).

function calculateSubsidy() { var annualIncome = parseFloat(document.getElementById("annualIncome").value); var householdSize = parseInt(document.getElementById("householdSize").value); var benchmarkPlanCost = parseFloat(document.getElementById("benchmarkPlanCost").value); if (isNaN(annualIncome) || annualIncome < 0) { document.getElementById("result").innerHTML = "Please enter a valid Annual Household Income."; return; } if (isNaN(householdSize) || householdSize < 1) { document.getElementById("result").innerHTML = "Please enter a valid Household Size (at least 1)."; return; } if (isNaN(benchmarkPlanCost) || benchmarkPlanCost < 0) { document.getElementById("result").innerHTML = "Please enter a valid Estimated Monthly Benchmark Plan Cost."; return; } // 2023 Federal Poverty Level (FPL) guidelines for 48 contiguous states and DC // Source: https://aspe.hhs.gov/topics/poverty-economic-mobility/poverty-guidelines var fplBase = 14580; // FPL for 1 person var fplIncrement = 5140; // Increment for each additional person var fplForHousehold; if (householdSize === 1) { fplForHousehold = fplBase; } else { fplForHousehold = fplBase + (fplIncrement * (householdSize – 1)); } var fplPercentage = (annualIncome / fplForHousehold) * 100; var targetContributionRate; // as a percentage of income // Determine target contribution rate based on FPL percentage // These are the official ACA/IRA percentages for 2023/2024 if (fplPercentage = 150 && fplPercentage = 200 && fplPercentage = 250 && fplPercentage = 300 && fplPercentage = 400 (due to ARPA/IRA, capped at 8.5%) targetContributionRate = 8.5; } var maxMonthlyPremiumContribution = (annualIncome * (targetContributionRate / 100)) / 12; var monthlySubsidy = benchmarkPlanCost – maxMonthlyPremiumContribution; var resultHTML = ""; if (monthlySubsidy <= 0) { resultHTML = "Based on your inputs, your estimated monthly subsidy is $0.00."; resultHTML += "This could be because your income is too high for subsidies, or your estimated benchmark plan cost is lower than your maximum affordable contribution."; } else { resultHTML = "Your estimated monthly subsidy is: $" + monthlySubsidy.toFixed(2) + ""; resultHTML += "This subsidy helps reduce your monthly premium for a Covered California health plan."; } resultHTML += "Details:"; resultHTML += "

"; resultHTML += "
• Your Household FPL: " + fplPercentage.toFixed(1) + "%
"; resultHTML += "
• Maximum Monthly Premium Contribution (based on FPL): $" + maxMonthlyPremiumContribution.toFixed(2) + "
"; resultHTML += "
• Estimated Monthly Benchmark Plan Cost: $" + benchmarkPlanCost.toFixed(2) + "
"; resultHTML += "

"; resultHTML += "Note: This is an estimate. Your actual subsidy may vary based on specific plan costs, age, county, and final eligibility determination by Covered California."; document.getElementById("result").innerHTML = resultHTML; }

Understanding Covered California Subsidies

Covered California is the state's health insurance marketplace, established under the Affordable Care Act (ACA). Its primary goal is to make health insurance more accessible and affordable for Californians who don't have coverage through an employer, Medicare, or Medi-Cal.

What is a Subsidy?

A subsidy, in the context of Covered California, is financial assistance from the government that helps reduce the cost of your monthly health insurance premiums. These are officially known as Premium Tax Credits (PTCs) or Advanced Premium Tax Credits (APTCs) if paid directly to your insurer. California also offers additional state-funded subsidies to further lower costs for eligible residents.

Who is Eligible for Subsidies?

Eligibility for Covered California subsidies primarily depends on your Modified Adjusted Gross Income (MAGI) and your household size, relative to the Federal Poverty Level (FPL). Generally, individuals and families with incomes between 138% and 400% of the FPL were eligible for federal subsidies. However, with the enhancements from the American Rescue Plan Act (ARPA) and extended by the Inflation Reduction Act (IRA), subsidies are now available to more people, including those above 400% FPL, ensuring that no one pays more than 8.5% of their household income for a benchmark Silver plan.

Other eligibility requirements include:

• You must be a California resident.
• You must not be incarcerated.
• You must be a U.S. citizen, U.S. national, or lawfully present immigrant.
• You must not be eligible for affordable health coverage through an employer (unless the employer's plan is deemed unaffordable or doesn't meet minimum value standards).
• You must not be eligible for Medicare or Medi-Cal.

How are Subsidies Calculated?

The amount of your subsidy is determined by a few key factors:

1. Your Household Income (MAGI) and Household Size: These two factors determine your Federal Poverty Level (FPL) percentage. The lower your income relative to the FPL, the larger your potential subsidy.
2. The Cost of the Benchmark Plan: This is the second-lowest-cost Silver plan available in your specific rating area (county) for your age group. The subsidy is designed to limit how much you have to pay for this benchmark plan, based on a sliding scale of your income.

The subsidy calculation works by determining a "maximum affordable contribution" you are expected to pay for the benchmark plan, based on your income as a percentage of the FPL. The subsidy then covers the difference between this maximum contribution and the actual cost of the benchmark plan.

For example, if your maximum affordable contribution for the benchmark plan is $100 per month, and the benchmark plan in your area costs $500 per month, your monthly subsidy would be $400 ($500 – $100). You would then pay $100 for the benchmark plan, or you could use the $400 subsidy towards a more expensive plan (paying the difference) or a less expensive plan (potentially paying less than $100).

Federal Poverty Level (FPL) and Contribution Rates (2023/2024 Guidelines):

The percentage of your income you're expected to contribute towards the benchmark plan premium varies based on your FPL:

• Below 150% FPL: You may pay 0% of your income for the benchmark plan, and potentially qualify for enhanced Silver plans with very low deductibles and out-of-pocket costs.
• 150% to 200% FPL: Your contribution is capped between 0% and 2% of your income.
• 200% to 250% FPL: Your contribution is capped between 2% and 4% of your income.
• 250% to 300% FPL: Your contribution is capped between 4% and 6% of your income.
• 300% to 400% FPL: Your contribution is capped between 6% and 8.5% of your income.
• Above 400% FPL: Your contribution is capped at 8.5% of your income for the benchmark plan, thanks to recent legislative changes.

These percentages are applied on a sliding scale, meaning the exact percentage increases gradually as your income approaches the higher end of each FPL bracket.

Cost-Sharing Reductions (CSRs)

In addition to premium subsidies, individuals and families with incomes up to 250% of the FPL may also qualify for Cost-Sharing Reductions (CSRs). These are extra savings that lower your out-of-pocket costs like deductibles, co-payments, and co-insurance. CSRs are only available if you enroll in a Silver plan.

Using the Calculator

To use this calculator, you'll need your estimated annual household income (MAGI), your household size, and an estimate of the monthly benchmark plan cost in your area. The benchmark plan cost can be found on the Covered California website when you shop for plans, or you can use a general estimate. Remember, this calculator provides an estimate, and your actual subsidy will be determined by Covered California based on your full application.

Important Considerations:

• Income Changes: If your income changes during the year, it's crucial to update Covered California. Changes can affect your subsidy amount, potentially leading to owing money back or receiving a larger refund at tax time.
• Benchmark Plan Cost: The benchmark plan cost varies significantly by county and age. Using an accurate estimate for this input will yield a more precise subsidy calculation.
• State Subsidies: California offers additional state subsidies that can further reduce costs, especially for those with lower incomes. This calculator primarily focuses on the federal APTC calculation but acknowledges the overall goal of affordability.