How does the ACA subsidy work in 2022?

[FANOFJESUS]

$51,520 - 400% FPL -- ACA subsidy reduced to the point where premium can be 8.5% of income (household of 1, Lower 48)

If I understand the law it start to be reduced at $51,520 gradually. It would be about 75k of income you would be at 8.5% of income for health insurance. No ACA cliff in 2021 or 2022. Is that right?

 

[Gumby]

$51,520 - 400% FPL -- ACA subsidy reduced to the point where premium can be 8.5% of income (household of 1, Lower 48)

If I understand the law it start to be reduced at $51,520 gradually. It would be about 75k of income you would be at 8.5% of income for health insurance. No ACA cliff in 2021 or 2022. Is that right?

There are those who know the ACA far better than I, and I hope they chip in. But my understanding is that once you reach 400%, there is no longer a cliff. Rather, the subsidy is whatever it takes so that the benchmark silver plan premium does not exceed 8.5% of your income. Thus, for every $100 additional you make, your subsidy will be reduced by $8.50 until you are paying 8.5% or less of your income for the premium (i.e. - zero subsidy)

At levels below 400% of FPL, the subsidy is whatever it takes so that the benchmark silver plan premium does not exceed X% of your income, where X is progressively less than 8.5% as your income goes down.

Here is a table:

Income as % of FPL Max premium as % of Income
100% – 138% 0%
138% – 150% 0%
150% – 200% 0.0% – 2.0%
200% – 250% 2.0% – 4.0%
250% – 300% 4.0% – 6.0%
300% – 400% 6.0% – 8.5%
Over 400% 8.50%

 

[FANOFJESUS]

There are those who know the ACA far better than I, and I hope they chip in. But my understanding is that once you reach 400%, there is no longer a cliff. Rather, the subsidy is whatever it takes so that the benchmark silver plan premium does not exceed 8.5% of your income. Thus, for every $100 additional you make, your subsidy will be reduced by $8.50 until you are paying 8.5% or less of your income for the premium (i.e. - zero subsidy)

At levels below 400% of FPL, the subsidy is whatever it takes so that the benchmark silver plan premium does not exceed X% of your income, where X is progressively less than 8.5% as your income goes down.

Here is a table:

Income as % of FPL Max premium as % of Income
100% – 138% 0%
138% – 150% 0%
150% – 200% 0.0% – 2.0%
200% – 250% 2.0% – 4.0%
250% – 300% 4.0% – 6.0%
300% – 400% 6.0% – 8.5%
Over 400% 8.50%

I see your point but think I am right. Check out the insurance rates here put in a number higher than the old cliff and you will see what I mean.
https://www.healthcare.gov/see-plans/#/

 

[FANOFJESUS]

There are those who know the ACA far better than I, and I hope they chip in. But my understanding is that once you reach 400%, there is no longer a cliff. Rather, the subsidy is whatever it takes so that the benchmark silver plan premium does not exceed 8.5% of your income. Thus, for every $100 additional you make, your subsidy will be reduced by $8.50 until you are paying 8.5% or less of your income for the premium (i.e. - zero subsidy)

At levels below 400% of FPL, the subsidy is whatever it takes so that the benchmark silver plan premium does not exceed X% of your income, where X is progressively less than 8.5% as your income goes down.

Here is a table:

Income as % of FPL Max premium as % of Income
100% – 138% 0%
138% – 150% 0%
150% – 200% 0.0% – 2.0%
200% – 250% 2.0% – 4.0%
250% – 300% 4.0% – 6.0%
300% – 400% 6.0% – 8.5%
Over 400% 8.50%

One time I put in 51k. The next time I put in 53k(which is above the Cliff) the rate was $20 higher for the same plan.
https://www.healthcare.gov/see-plans/#/
You would get up to 8.5% of income but slowly.

 

[FANOFJESUS]

Type in 85k as an income see how little help from the government you get. So the full cutoff is around 90k from what I see. Just a rough number.
https://www.healthcare.gov/see-plans/#/

 

[Gumby]

I'm going to move this to its own thread, because it is now gumming up the trigger point thread with an exploration of how the ACA subsidies work.

 

[FANOFJESUS]

Thanks Gumby maybe folks that are ACA pro's can jump in here.

 

[FANOFJESUS]

Going by this full cutoff from government help is not reach until about 90k (rough number) for a single is that right?
https://www.healthcare.gov/see-plans/#/

 

[PaunchyPirate]

The “cutoff” will vary by geographic location due to the different costs of “the second lowest cost silver plan (SLCSP)” in the various zip codes.

Find the SLCSP in your zip code. The maximum you will pay for that SLCSP plan is 8.5% of your Modified Adjusted Gross Income. Lower income levels will pay a lower percentage for that plan - see table in previous post. Any subsidy you may get is based on what is needed to get you the SLCSP for your defined % contribution amount. Because the price of that SLCSP is going to be higher for older people than younger within the same zip code, it’s fair to say that the cutoff will also vary by age.

After your subsidy is determined, you are free to use it on a lower cost plan or a higher cost plan. But the subsidy amount doesn’t change.

 

[FANOFJESUS]

The “cutoff” will vary by geographic location due to the different costs of “the second lowest cost silver plan (SLCSP)” in the various zip codes.

Find the SLCSP in your zip code. The maximum you will pay for that SLCSP plan is 8.5% of your Modified Adjusted Gross Income. Lower income levels will pay a lower percentage for that plan - see table in previous post. Any subsidy you may get is based on what is needed to get you the SLCSP for your defined % contribution amount. Because the price of that SLCSP is going to be higher for older people than younger within the same zip code, it’s fair to say that the cutoff will also vary by age.

After your subsidy is determined, you are free to use it on a lower cost plan or a higher cost plan. But the subsidy amount doesn’t change.

Is the link I provided correct with their numbers?

 

[SecondCor521]

The “cutoff” will vary by geographic location due to the different costs of “the second lowest cost silver plan (SLCSP)” in the various zip codes.

Find the SLCSP in your zip code. The maximum you will pay for that SLCSP plan is 8.5% of your Modified Adjusted Gross Income. Lower income levels will pay a lower percentage for that plan - see table in previous post. Any subsidy you may get is based on what is needed to get you the SLCSP for your defined % contribution amount. Because the price of that SLCSP is going to be higher for older people than younger within the same zip code, it’s fair to say that the cutoff will also vary by age.

After your subsidy is determined, you are free to use it on a lower cost plan or a higher cost plan. But the subsidy amount doesn’t change.

It'll also change based on family size (FPL varies based on family size), ages of the various family members, and tobacco use.

@FOJ, the previous comments by PaunchyPirate and Gumby seem accurate to me. You seem to be overlooking their point about how it can change based on the various factors.

If you provide your family size, ages, tobacco use, zip code, and AGI, then we could - if people are willing to put in the effort - tell you if your source is right or not. Just stating an AGI without the other factors makes it impossible to help you or answer your question specifically.