How do you get help paying for health insurance? It depends on what you earn. Your income to get 2021 Obamacare subsidies are based on – but higher than – last year’s federal poverty level (FPL). These discounts on your monthly health insurance payment are also known as premium tax credits.
What’s the Minimum Income for 2021 Obamacare Subsidies?
First, you have to project how much you’ll make in advance since you generally apply for coverage before the year starts.
Second, you have to compare it with the poverty level guidelines from the year before the coverage starts.
Why? There are two reasons:
- Open enrollment takes place before the start of each year.
- Federal poverty level numbers for each year aren’t published until open enrollment for that year’s coverage has already ended.
Subsidy eligibility is based on your income for the year you’re going to have coverage.
To get Obamacare subsidies in 2021, your household must earn (in 2021) at least 100% of the 2020 federal poverty level.
What You Need to Know
Subsidy eligibility is based on what you will make when you have healthcare coverage. Then it’s measured against poverty level guidelines for the previous year. So, 2021 health plans are measured against your projected income for 2021 but 2020 poverty level guidelines.
You qualify for federal aid if your 2021 projected income is one to four times the 2020 federal poverty level for your household size. So for 2021 health plans, a family of four could earn between $26,200 to $104,800.
You don’t qualify for federal aid if your 2021 projected income is more than four times the 2020 federal poverty level for your household size. So for 2021 health plans, a couple cannot earn more than $68,960.
2021 Total Household Income for Minimum ACA Subsidy
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What About Medicaid Instead of Subsidies?
In most states, those who make under 139% of the federal poverty level are offered Medicaid instead of subsidies.
So, for a single person, that amounts to $17,73.64; for a family of four, that amount equals $36,418.00.
Alaska and Hawaii are unique states with higher income guidelines – those can be found here.
A family of four qualifies qualify for federal help if their projected household income is at least $26,200.
2021 Obamacare Subsidies Income Calculator
Different families get different subsidies. Use our subsidy calculator above to find your premium tax credit.
What’s the Maximum Income for 2021 Obamacare Subsidies?
To get Obamacare subsidies, your household cannot make more than 400% of the federal poverty level. The cutoff amounts for 2021 plans are below.
2021 Total Household Income for Maximum ACA Subsidy
|Household Size||Household Income|
A family of four would not qualify for federal help if their projected household income exceeded $104,800.
What Year Are These Subsidies For?
This information – and these household income amounts – apply to health insurance plans that cover you and your family during 2021.
Affordable Care Act subsidies are still available, despite the ongoing debate over the law in Washington.
New federal poverty level income levels are released annually in January. Those numbers are used immediately to determine Medicaid and CHIP eligibility, and in November, when open enrollment begins, they’ll be used to determine eligibility for premium subsidies for the coming year.
What Counts As Income?
The right income to submit is your modified adjusted gross income (basically, the 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 per year. You simply won’t qualify for monthly premium discounts if your income sits outside the subsidy range.
Minimum and maximum levels change every year, based on how the poverty level numbers change.
For example, a household of four had to earn no more than $94,200 to qualify for premium subsidies in 2014, whereas a household of four will be able to earn up to $104,800 in 2021 and still qualify for subsidies.
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”). For a family of three, this amount is less than $21,720.
However, you’re probably eligible for Medicaid, depending on your state’s rules. To learn more, it’s important to apply directly to your state’s Medicaid program.
More Than 400% of FPL: If your household makes more than 400% of the federal poverty level, you can also consider off-Marketplace insurance on sites like HealthCareInsider.com. For a couple, this amount exceeds $68,960.
These plans are generally identical to subsidy-eligible plans, generally cost the same, and follow ACA rules. But depending on the area, you may find that different insurers offer plans outside the exchange, giving you more options from which to choose.
What About Cost-Sharing Reductions (CSRs)?
Health insurance providers must give additional discounts on subsidy-eligible silver plans to members earning between 100% and 250% of the federal poverty level.
These discounts, called cost-sharing reductions, reduce the cost of out-of-pocket healthcare charges for things like specialists and medication. CSRs are not available on bronze, gold or platinum plans. More than 50% of exchange enrollees get CSR every year.
Cost-sharing subsidy guidelines are set by the government, so the out-of-pocket limits and actuarial value of these plans are standardized based on the applicant’s income. But insurers have flexibility in terms of designing the plans within those guidelines.
As a result, the various silver plans available to you will differ from one insurer to another, even if you’re eligible for cost-sharing reductions.
How Much Healthcare Can Subsidies Cover?
According to healthcare analysts, about 96% of counties had bronze plans available with $0 monthly premiums,1 after subsidies (in 2021, for a 40-year-old making 160% of the federal poverty level), and about 87% of enrollees get premium subsidies every year.2
You’ll be asked to cover some portion of your medical care once you use your health plan. However, subsidies could make your plan of choice free to join.