Affording Health Coverage in 2014

Understanding the Affordable Care Act Affording Low and Middle-Income Health Americans Will Coverage to Help Pay for in 2014 Receive Tax Credits Health Insurance Starting in 2014, Americans earning up to four times the federal poverty level (currently $47,100 for an individual and $94,200 for a family of four") will be eligible for premium tax credits to help them buy health coverage in insurance marketplaces (also known as "exchanges"). Here are two examples: How much will low- and middle-income people receive?** Individual Family $3,550 $11,090 Jane will receive a $3,550 annual premium tax credit for health insurance. The Johnson family will receive an $11,090 annual premium tax credit for health insurance. She will spend 6% (instead of 22%) of her The family will spend 4% (instead of 35%) of its income on health income on health coverage, thanks to premium tax credits. coverage, thanks to premium tax credits. THE NUMBERS JANE annual figures JOHNSON FAMILY $23,000 INCOME $35,300 $5,000 PLAN COST $12,500 AMOUNT OF PREMIUM $3,550 $11,090 TAX CREDIT $1,450 COST OF COVERAGE $1,410 PERCENT OF INCOME 6% 4% PAID TOWARD PREMIUMS NOTES: *These numbers are based on 2013 federal poverty levels. **These two examples illustrate the amount of assistance that different kinds of people could receive. The size of the tax credit for which an individual or family will be eligible will depend on income. This example uses a health insurance plan called "the silver reference plan"-the second-lowest cost coverage option of four plans offered by each state marketplace (listed here from lowest to highest level of coverage: bronze, silver, gold, and platinum). The size of the tax credit is always based on the cost of the silver reference plan. The out-of-pocket premium contribution for an individual or family will depend on which plan they select. www.FamiliesUSA.org Families USA, 2013