Beginning in January 2014, there will be several new government programs that offer financial assistance to help lower the cost of health insurance:
Tax credits will be available to help lower the cost of your monthly health insurance premium.
Cost-sharing subsidies will reduce the amount of out-of-pocket health care expenses an individual or family has to pay.
Tax credits are available for individuals and families who meet certain income requirements and do not have access to affordable health insurance through their employer or another government program.
Eligibility for tax credits is based on a standard, called the "federal poverty level," that looks at the family income and the number of people in the family. The size of the tax credit is based on a sliding scale, with those who make less money getting a larger financial support to lower the cost of their insurance coverage. Individuals and families who make between 138% and 400% of the federal poverty level may be eligible for a tax credit. This means that an individual making up to $45,960 and a family of four earning up to $94,200 may be eligible for a tax credit.
There are some key facts about tax credits:
- Tax credits reduce the amount of the premium you will pay for insurance
- Tax credits are available to individuals and families who meet certain income requirements.
- Tax credits can be applied to the cost of your health plan when you enroll – you do not need to wait until you file a tax return at the end of the year.
- Tax Credits can only be used if you enroll in a health through Covered California
- Tax credits are paid by Covered California directly to your health plan to keep your costs low.
- Tax credits may be adjusted if your income is different than you anticipated.
While tax credits can help lower monthly premium payments, cost-sharing subsidies protect people with health insurance from high out-of-pocket costs at the time of service. If you qualify for cost-sharing subsidies, you will pay less for health care expenses, including costs incurred when you receive medical care.
These government financial assistance programs are offered on a sliding scale, based on your annual household income: the higher your income, the lower the amount of your financial assistance.
You may be eligible for subsidies if your income is less than about $28,725 for a single person and less than about $58,874 for a family of four in 2013.
Estimating Costs and Financial Assistance
Covered California has a cost-estimate calculator that can help you estimate about how much you will pay per year for insurance coverage and the size of any financial support.