Affordable Care Act Subsidy Calculator
Estimate your potential Premium Tax Credits (subsidies) under the Affordable Care Act (ACA) to help lower the cost of health insurance premiums purchased through the Health Insurance Marketplace.
This calculator uses current Federal Poverty Level (FPL) guidelines and subsidy contribution rates to provide an estimate. Your actual subsidy may vary based on specific plan costs in your area, age, and other factors.
Understanding the Affordable Care Act (ACA) and Subsidies
The Affordable Care Act (ACA), often referred to as Obamacare, aims to make health insurance more accessible and affordable for Americans. A key component of the ACA is the provision of financial assistance, primarily through Premium Tax Credits (PTCs), to help eligible individuals and families pay for health insurance premiums purchased through the Health Insurance Marketplace (also known as the exchange).
How Premium Tax Credits Work
Premium Tax Credits are government subsidies that reduce the amount you have to pay each month for your health insurance plan. They are "advanceable," meaning you can choose to have them paid directly to your insurance company each month to lower your premium, or you can claim them when you file your federal tax return.
Eligibility for Subsidies
Eligibility for Premium Tax Credits is primarily based on two factors:
- Household Income: Your Modified Adjusted Gross Income (MAGI) relative to the Federal Poverty Level (FPL). Generally, individuals and families with incomes between 100% and 400% of the FPL are eligible. Under the Inflation Reduction Act (IRA), the 400% FPL cap was temporarily removed, ensuring that no one pays more than 8.5% of their household income for a benchmark silver plan.
- Household Size: The number of people in your tax household. This is used to determine your FPL percentage.
You must also meet other criteria, such as not being eligible for affordable coverage through an employer or government programs like Medicaid or Medicare.
Federal Poverty Level (FPL)
The Federal Poverty Level is a set of income thresholds used by the federal government to determine eligibility for various federal programs and benefits. The FPL varies based on household size. Your income as a percentage of the FPL determines how much financial assistance you may receive. For example, if your income is 200% of the FPL, it means your income is twice the poverty threshold for your household size.
Benchmark Silver Plan
The amount of your Premium Tax Credit is calculated based on the cost of the second-lowest-cost silver plan available in your area (the "benchmark plan"). The subsidy aims to limit your premium contribution for this benchmark plan to a certain percentage of your income, based on your FPL. You can then use this subsidy to purchase any plan on the Marketplace, though it will go furthest if applied to a silver plan or lower-cost bronze plan.
Medicaid and CHIP
If your household income is below 138% of the FPL, you may be eligible for Medicaid or the Children's Health Insurance Program (CHIP), depending on your state's policies. Many states have expanded Medicaid eligibility under the ACA, but some have not. If you are eligible for Medicaid, you generally won't be eligible for Marketplace subsidies.
How This Calculator Works
This calculator estimates your potential Premium Tax Credit by:
- Determining your Federal Poverty Level (FPL) percentage based on your household income and size (using 2023 FPL guidelines for consistency).
- Calculating the maximum percentage of your income you are expected to contribute towards a benchmark silver plan premium, based on your FPL percentage and current ACA rules.
- Subtracting your maximum contribution from the estimated benchmark silver plan premium you provide to determine your potential subsidy.
Important Note: The "Estimated Benchmark Silver Plan Premium" is a crucial input. You will need to find an estimate for your specific area and age group on your state's Marketplace website (e.g., Healthcare.gov) to get the most accurate subsidy estimate. This calculator cannot predict the exact cost of plans in your specific location.
Disclaimer
This calculator provides an estimate for informational purposes only and should not be considered financial or legal advice. Actual eligibility and subsidy amounts are determined by the Health Insurance Marketplace based on your full application. FPL guidelines and subsidy rules can change annually. Always consult official sources like Healthcare.gov or a licensed insurance agent for personalized advice.