Health Insurance Subsidy for early retirees

[drunarayan]

I am looking at early retirement and see that there is a Health Insurance Subsidy in my state of WA. Has anyone used this subsidy? How is it working in practice?

I have included a calculator below. The subsidy amounts are hard to believe. If you enter less than $65K for income in WA for a family of 2 you get a eye-popping number of $173k for an annual subsidy amount! Is this for real?

btb. $70k for income yields -zero- subsidy.

https://www.healthedeals.com/obamacare-calculator/

Based on this, one could assume that if you kept your AGI below $65K for a family of 2 - health insurance is free? It is too good to be true.

Thanks!

 

[cathy63]

As long as your income is below 400% of the federal poverty limit, then you are eligible for an ACA premium tax credit if you purchase health insurance from the government exchange for your state (or the federal one if your state doesn't have its own). For 2019, that number is $65,840 for a family of 2.

If you purchase a Silver plan, then you will also be eligible for cost sharing benefits which lower your deductible and co-pays throughout the year. The insurance will not be free unless you are earning much less than 400% FPL though, and if you are close to that line and don't use a lot of health care, you may find that it's cheaper overall to get a Bronze plan even though the deductibles and co-pays will be higher when you do go to the doctor.

The $173K amount does not sound like a real number. In order for that to be accurate, there would have to be a plan with premiums over $14K/month.

 

[sengsational]

Just buy your policy on healthcare.gov and you're good to go if you keep below the 400% FPL "cliff". Usually "free" is for the Bronze level. Not only that, there's another nugget: if you buy an HDHP (one legit for an HSA), you can shelter about $8K of income and never pay taxes on it (if used for later healthcare expenses).


Sounds like you're just dipping your toe in this, but it's been real for many years.

 

[ABQ2015]

Looks like a glitch in the software. I get similar results of about $155k for 2 people.

 

[CountryBoy]

There is something seriously wrong with that healthcaredeals calculator link you posted! I ran a family of 2 making 64K on the Kaiser Insurance Marketplace Calculator for Washington and came up with a monthly subsidy of around $775.

 

[Aerides]

Your link is from an insurance company, not from the ACA itself, so I'd ignore it and go to more official sources.

 

[zinger1457]

Try using the Kaiser ACA calculator, I've always had good results from it.
https://www.kff.org/interactive/sub...MI1fWqxfDw3wIVRRx9Ch1fAQO_EAAYASAAEgJ4GPD_BwE

 

[SecondCor521]

Your link is from an insurance company, not from the ACA itself, so I'd ignore it and go to more official sources.

The most official source I know of is the ACA exchange for your state. Google "ACA <your state> exchange" and it should be the first link.

A lot of states use the federal site (healthcare.gov I think), but some states have their own (like my state - yourhealthidaho.org).

Another way to get to the same place is to go to the federal exchange and put in your state. If your state has it's own exchange then they'll point you to it.

 

[drunarayan]

Thank you all. Clearly there was a problem with the calculator in my original link.

The Kaiser calculator yields believable results.

With the subsidy in this example, one ends up paying about 10% of a "silver" plan for husband-wife, no kids in WA as long as the income is at or below $65K. A big help in achieving FIRE.

 

[michelek]

Healthsherpa.com is a good website for comparing plans and subsidies