Healthcare Subsidy Calculator
Estimate your potential monthly healthcare premium subsidy under the Affordable Care Act (ACA).
This is the cost of the second-lowest cost Silver plan in your area. You can find this on healthcare.gov or your state's marketplace. If unknown, leave blank for income contribution estimate.
Your Estimated Subsidy Details:
Enter your details and click "Calculate Subsidy" to see your estimate.
Understanding Healthcare Subsidies
The Affordable Care Act (ACA), often referred to as Obamacare, provides financial assistance to help individuals and families afford health insurance coverage purchased through the Health Insurance Marketplace. These subsidies, officially called Premium Tax Credits (PTCs), reduce the amount you pay each month for your health insurance premium.
Who is Eligible?
Eligibility for healthcare subsidies primarily depends on your household income and household size relative to the Federal Poverty Level (FPL). Generally, you must meet the following criteria:
- Your household income is between 100% and 400% of the FPL (or above 400% with enhanced subsidies from the Inflation Reduction Act).
- You are not eligible for affordable coverage through an employer or government programs like Medicaid or Medicare.
- You file taxes jointly if married.
It's important to note that some states have expanded Medicaid eligibility, which can affect who qualifies for marketplace subsidies at lower income levels.
How Subsidies Are Calculated
The amount of your subsidy is determined by a complex formula that aims to cap your premium contribution at a certain percentage of your household income. This percentage varies based on how far above the Federal Poverty Level your income falls. The subsidy then covers the difference between this capped amount and the cost of a benchmark plan – specifically, the second-lowest cost Silver plan available in your area.
Key factors in the calculation include:
- Household Income: Your Modified Adjusted Gross Income (MAGI) is used.
- Household Size: This determines your relevant Federal Poverty Level threshold.
- Cost of the Benchmark Plan: The actual premium of the second-lowest cost Silver plan in your specific rating area (which varies by location and age).
Federal Poverty Level (FPL) and Contribution Limits (2024)
The Federal Poverty Level (FPL) is a set of income thresholds used to determine eligibility for various federal programs. For healthcare subsidies, your income as a percentage of FPL dictates the maximum percentage of your income you're expected to contribute towards health insurance premiums. Thanks to the Inflation Reduction Act, these contribution limits are temporarily enhanced, making subsidies more generous and extending eligibility to more people.
For 2024, the FPL thresholds for the 48 contiguous states and D.C. are approximately:
- 1 Person: $14,580
- 2 People: $19,720
- 3 People: $24,860
- 4 People: $30,000
- Each additional person: Add $5,140
The maximum percentage of income you're expected to pay for the benchmark plan, based on your FPL, is approximately:
- 100% – 150% FPL: 0% of income
- 150% – 200% FPL: 0% to 2% of income
- 200% – 250% FPL: 2% to 4% of income
- 250% – 300% FPL: 4% to 6% of income
- 300% – 400% FPL: 6% to 8.5% of income
- Above 400% FPL: 8.5% of income
This calculator uses these general FPL guidelines and contribution percentages to provide an estimate. Actual FPL thresholds can vary slightly by state (e.g., Alaska and Hawaii have higher FPLs), and the exact benchmark premium depends on your specific location and age.
How to Use This Calculator
- Annual Household Income: Enter your estimated Modified Adjusted Gross Income (MAGI) for the year you want coverage.
- Number of People in Household: Include yourself, your spouse, and anyone you claim as a tax dependent.
- Estimated Monthly Benchmark Premium: This is crucial for a precise subsidy estimate. You can find this by browsing plans on healthcare.gov or your state's marketplace. Look for the second-lowest cost Silver plan for your household. If you don't know it, the calculator will still show your maximum income contribution.
Remember, this calculator provides an estimate. For a precise determination of your subsidy, you must apply through the official Health Insurance Marketplace at healthcare.gov or your state's equivalent.
Example Calculation
Let's say a family of three has an annual household income of $45,000. The FPL for a family of three is $24,860. Their income is approximately 181% of the FPL ($45,000 / $24,860 = 1.81, or 181%).
According to the 2024 guidelines, an income between 150% and 200% FPL means they are expected to contribute between 0% and 2% of their income towards the benchmark premium. Using linear interpolation, at 181% FPL, their expected contribution would be around 1.24% of their income.
So, their maximum annual premium contribution would be $45,000 * 0.0124 = $558. Annually, or $46.50 per month.
If the estimated monthly benchmark premium for this family is $800, their estimated monthly subsidy would be $800 – $46.50 = $753.50.