I'm trying to understand the formula for calculating the ACA premium tax subsidy. I know there are calculators online, but only for 2016 plans. I also know that I can get this info on healthcare.gov as of Nov. 1, but I'm trying to understand this now.
First, you need to be less than 4x of the federal poverty level (about $64k per year for 2 people in 2017). We will be just under that. With that qualification it is my understanding that the difference between roughly 10% of your MAGI and the cost of the second lowest silver plan is your subsidy. In other words, if you bought that silver plan, your premium is capped at 10% of your MAGI. Is this right? If so, my subsidy for 2017 would be nearly $15,000 for my wife and I.
$64,000 X 10% = $6,400 - $21,228 (silver plan annual cost in AZ for two) = $14,828
At least I hope that is how it is calculated.
First, you need to be less than 4x of the federal poverty level (about $64k per year for 2 people in 2017). We will be just under that. With that qualification it is my understanding that the difference between roughly 10% of your MAGI and the cost of the second lowest silver plan is your subsidy. In other words, if you bought that silver plan, your premium is capped at 10% of your MAGI. Is this right? If so, my subsidy for 2017 would be nearly $15,000 for my wife and I.
$64,000 X 10% = $6,400 - $21,228 (silver plan annual cost in AZ for two) = $14,828
At least I hope that is how it is calculated.