Health Insurance Subsidies: A Guide to Getting Financial Aid for ACA Plans

Healthcare Writer

Updated on June 4th, 2024

Reviewed by Frank Lalli

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How to Get Help Paying for Health Insurance

Your eligibility for ACA (Obamacare) plan subsidies this year depends on your income. If the cost of the “benchmark plan” (the second-lowest-cost silver plan) is more than a certain percentage of your income, up to 8.5%, you qualify for subsidies. These subsidies, also known as Premium Tax Credits (PTC) or Advance Premium Tax Credits (APTC), lower your monthly health insurance payments.

In 2024, your eligibility is based on your projected income and the benchmark plan cost. If you pay more than 8.5% of your household income towards health insurance, you qualify for subsidies.

Next Steps: Check your eligibility using the calculator above, regardless of your income, to see your subsidy rate or consider switching plans.

Calculating Your 2024 Obamacare Subsidy

Subsidies are based on your income, the list price of the benchmark plan, and your required contribution toward health insurance. The actual subsidy is the difference between the benchmark plan and your expected contribution. You must estimate your income and compare it to the total plan premium before coverage starts.

How Are Obamacare Subsidies Calculated?

The American Rescue Plan (ARP) of 2021 and the Inflation Reduction Act (IRA) of 2022 made ACA more affordable in two ways:

  1. Income Cap Removal: There is no longer a Federal Poverty Level (FPL) income cap. The benchmark Silver plan costs no more than 8.5% of your annual household income, regardless of income level. Before 2021, you were expected to spend between 2% and 9.83% of your income on health insurance. This range is now 0% to 8.5% until the end of 2025.
  2. Enhanced Subsidies for Unemployment: Since 2021, those receiving unemployment benefits can enroll in a low-cost, low-deductible health plan with enhanced federal subsidies. Additionally, the Biden administration fixed the “family glitch” in October 2022, allowing family members of people with employer plans to obtain subsidies.

Since you can never be sure what your total income will be at the end of the year, be realistic about your prospects of earning more or less than last year.

  • Use your last year’s tax return as a basis, and specifically, look at income numbers after deductions on lines 37 and 21 on your 1040 or line 4 of your 1040EZ.
  • If you are part of a household, you must include income from your spouse and all your dependents, even if they don’t live with you. 

Know up front that if you are among the seven million who don’t file an income tax return, you don’t qualify for any subsidies. 

Where Can I See If I Qualify for Subsidies?

You can easily calculate what sort of subsidies you might qualify for with our ACA subsidy calculator. The calculator requires your ZIP code, household size, and income. (You may read this as annual household income, modified adjusted gross income, or yearly income – they’re all very similar.)

Your subsidy is a single amount that applies across all plans, even though different plans will charge different monthly premiums. 

Once you input all your information, your premium subsidy, if any, will pop up. It is calculated automatically, and you don’t have to do anything further. When you sign up for a specific insurance plan, the subsidy will be sent monthly to your insurance company for the entire year, unless you drop the plan. 

What if My Estimated Income Is Wrong?

If it turns out that you underestimated your income, you’ll have to pay back some or all of the subsidies you got based on your low estimate. This payback will occur when you file your taxes the following year. 

The government calls this a “clawback”. Normally, depending on your income, you may not have to pay back all the money.

On the other hand, if you end up overestimating your income, you’ll receive the subsidies you deserve through your tax return either by lowering what you owe in income tax or as a refund.

ACA Subsidy Repayment Caps for Fiscal Year 2024:

Repayment Limits for Advanced Premium Tax Credits, 2024 Tax Year

Income as a percentage of the poverty lineRepayment limit for an individualIncome as a percentage ofpoverty lineRepayment limit for other taxpayersAnnual income of a family of four
Under 200%Under $29,160$350Under $60,000$700
Income as a percentage of the poverty line$29,160 to $43,740$900$60,000 to $90,000$1,800
At least 200% but less than 300%$43,740 to $58,320$1,500$90,000 to $120,000$3,000
400% and above$58,320 or moreNone$120,000 or moreNone

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