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How do you get help paying for health insurance?

It depends on how much you earn. In 2024, you’re eligible for Obamacare subsidies if the cost of the “benchmark plan” (the second-lowest-cost silver plan on the exchange) costs more than a given percent of your income, up to a maximum of 8.5%. The cut-off threshold increases on a sliding scale depending on your income. The discount on your monthly health insurance payment is also known as a Premium Tax Credit (or PTC) or Advance Premium Tax Credit (APTC).

2024 health plans are measured against your projected income for 2024 and the benchmark plan cost. You qualify for subsidies if you pay more than 8.5% of your household income toward health insurance.

Consumers in these plans saved an average of $800 on their premiums in 2021 as a result of the American Rescue Plan. This will continue to be available through December 31, 2025.

Next Steps
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The bottom line is that it pays to check your eligibility level regardless of your income. Use the calculator above to determine your subsidy rate or to see if switching is the right choice.

How Do You Figure Out Your 2024 Obamacare Subsidy?
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Subsidies, or premium tax credits, are based on Your income, the list price of the benchmark plan, and how much you are required to pay toward your health insurance. The actual subsidy differs between the benchmark plan and your expected contribution.

You have to estimate how much you’ll make since you generally apply for coverage before the year starts. Before coverage starts, you must also compare the total plan premium and your household income.

How Are Obamacare Subsidies Calculated?

The American Rescue Plan Act (ARP) of 2021 and Inflation Reduction (IRA) of 2022 improved the affordability of the Affordable Care Act (ACA).

How? In two major ways:

First: There is no longer a  Federal Poverty Level (FPL) income cap requirement. Previously, if you earned more than 400% FPL, you didn’t qualify for subsidies. The benchmark Silver plan costs no more than 8.5% of your annual household income, no matter how high that income is. The subsidies eventually drop off to nothing, but they taper off gradually now instead of ending when your income hits 400% FPL. Before 2021, you were expected to spend from around 2% to 9.83% of your household income toward health insurance. That range dropped from 0% to 8.5% until the end of 2025.

Second: As of 2021, anyone who received or was approved for unemployment benefits can enroll in a free- (or low-cost), low-deductible health plan after the enhanced federal subsidies.In October 2022, the Biden administration also fixed the so-called “family glitch,” which blocked family members of people with employer plans from obtaining subsidies.

How Much You Pay for a Benchmark Silver Plan

Source: Internal Revenue Service. 26 CFR 601.105. irs.gov. Accessed September 2023.

Households with more than 8 people should add $5,140 per person.

What About Medicaid Instead of Subsidies?

In most states, those who make up to 138% of the federal poverty level qualify for Medicaid eligibility instead of ACA exchange subsidies. In 2023, for a single person, 138% of the poverty level equates to $14,580; for a family of four, that amount equals $30,000.

Alaska and Hawaii are unique states with higher income guidelines – those can be found here.

What Are These Subsidies For?

This information applies to health insurance plans that cover you and your family during 2024. ACA subsidies are available to reduce your monthly payments or as a credit for next year’s tax filing with the IRS.New federal poverty level income levels are released annually in January. Those numbers are used immediately to determine eligibility for Medicaid and the Children’s Health Insurance Program (CHIP). They are also used in November when the ACA Open Enrollment Period begins.

What Counts As Income?

The right income to submit is your modified adjusted gross income or MAGI (basically, the annual income you report on your tax return, with a few tweaks).

What If You Earn Too Much or Too Little to Qualify for Subsidies?

You can still “get Obamacare” no matter how much you make yearly. You won’t qualify for monthly premium assistance if you make more than the income limit.

Less Than 100% of FPL: If your household makes less than 100% of the federal poverty level, you don’t qualify for premium tax credits (“Obamacare subsidies”). However, in most states, you’re probably eligible for Medicaid. To learn more, applying directly to your state’s Medicaid program is important.

2024 Total Household Income for Minimum ACA Subsidy

If You Don’t Qualify: If your household makes too much to qualify for a subsidy, you can also consider off-Marketplace insurance.

These plans are generally identical to subsidy-eligible plans, cost the same, and follow ACA rules.

In some states, you’ll be able to find off-exchange ACA-compliant Silver plans, which are identical to their on-exchange counterparts but which have a lower unsubsidized price, via a pricing strategy called “Silver Loading”. There’s a long, strange story behind why this is the case, but the bottom line is that those who don’t qualify for financial subsidies might find some Silver plans off-exchange, which cost less than their on-exchange counterparts.

Depending on the area, you may also find that different insurers offer plans outside the exchange, giving you more options from which to choose.

What About Expanded Marketplace Subsidies?

Under the 2021 American Rescue Plan and 2022 Inflation Reduction Act, individuals earning up to 150% FPL can enroll in a Silver benchmark plan for $0 with dramatically reduced deductibles and other out-of pocket expenses. Previously, no matter how low-income you were, people had to contribute something toward the cost of the benchmark Silver plan.

If you received unemployment benefits or were approved for them at any point during 2023, you also qualify for the expanded subsidies through the federal Health Insurance Marketplace.

On the other end of the spectrum, people who make more than 400% FPL can also qualify for a premium subsidy. In the past, anyone making more than the income cap was unable to qualify and would have to pay full price, whether on or off the exchange.