The cost of a health insurance policy under Obamacare depends on a
number of things — primarily, how big your family is, whether your
coverage is basic ‘bronze’ or top-notch ‘platinum,’ and where you
live. Here are some guidelines for figuring out how much Obamacare
will cost you.
By Peter Grier
How much does Obamacare cost? That’s one of the most common questions
average Americans have about the president’s signature health-care
Many know that the Affordable Care Act (Obamacare’s official name)
offers government cash to help many people buy insurance. But how much
are the subsidies? Who gets them? If you don’t qualify for this help,
is it possible you might have to pay more for health policies under
the new law?
We’ll try to answer these questions in plain language as best we can.
First, you’ve got to figure out if you need or qualify for Obamacare
at all. It’s offered through new state exchanges, which are virtual
stores where you can shop for policies. Anyone can browse, but the
exchanges are intended for people who buy their own insurance on the
open market. It’s also meant for those who don’t have insurance now
because their job doesn’t offer it, or because they can’t afford it.
If you get health coverage through your job, Obamacare is probably not
for you, unless you work for a business with fewer than 50 employees.
The cost to you for Obamacare depends on a number of things. First is
what sort of policy you buy. Insurers are required to offer different
levels of products. Their cheapest “bronze” plans are supposed to
cover 60 percent of your health costs. “Silver” plans cover 70
percent. “Gold” plans cover 80 percent, and “platinum” 90 percent.
Also, plans that cover a family are more expensive than those that
cover a couple, or an individual.
Second, the cost to you will depend on where you live. Insurance will
be more expensive in some states, even some counties, than in others.
Partly this is because of the prices of doctors, hospitals, and so
forth in your area. Partly it’s the result of the level of competition
between insurers, which varies a lot.
In Wyoming, for instance, only two companies offer plans through the
state exchange. Costs of health-insurance policies are higher there
than in neighboring Nebraska, where more companies are vying for
Third, your cost will depend on how much money you make. You’ll be
entitled to government subsidies if you earn up to 400 percent of the
federal poverty level. For an individual, that’s $45,960 a year. For a
family of four, it is $94,200.
Your assets, such as your house or car, don’t matter here. It’s all
How big will those subsidies be? They’re based on a sliding scale.
Obamacare caps the percentage of income that those eligible pay for
their health insurance.
Those who make 100 percent of the federal poverty level aren’t
supposed to spend more than 2 percent of their income on a health
policy. Those who make 200 percent aren’t supposed to spend more than
a bit more than 6 percent of their earnings on insurance.
For incomes that are 300 percent of the poverty level, you’re supposed
to spend about 8 percent on Obamacare. If you make 400 percent of the
poverty level, the cap is 9.5 percent.
The government takes the second-cheapest “silver” plan offered in your
area as a benchmark for determining your subsidy. For those eligible,
their subsidies will equal the cost of that plan, minus the money they
contribute up to their percentage cap. They can use that subsidy to
buy any of the metallic plans.
Confused? We’ll run a couple of examples through the Kaiser Family
Foundation’s excellent subsidy estimating calculator.
Let’s say you’re the head of a family of four that lives in Dallas,
with an income of $85,000 a year. The feds will give you a subsidy of
$287 annually. You’d pay $8,075 toward the second-cheapest “silver”
plan for your area. Assuming you get paid twice a month, that’s $336
per pay period.
Or say you’re a couple in San Francisco. Your combined income is
$50,000 a year. The U.S. government subsidy for you would be $2,322.
Between the two of you, you’d be laying out $198 each biweekly pay
period for “silver” health coverage.
Finally, we’ll estimate the case of a single parent living in Maine’s
rural Aroostook County, with an income of $18,000. The government
subsidy in this case would be $5,644 per year. The parent would pay
$15 for “silver plan” health insurance, every two weeks.
We’ll close with a couple of additional important points. If you make
less than 100 percent of the poverty level, you could be eligible for
Medicaid. Not all states are expanding Medicaid under Obamacare,
however, so your eligibility will vary according to where you live.
If you make more than four times the poverty level, you’ll be paying
for insurance on your own. Generally speaking, younger and healthier
people will pay more under the Obamacare system than they would have
in the past.
Older and less-healthy people will pay less.