Excellent article detailing the process of determining subsidy eligibility and what your actual subsidy will be.
A key role in determining subsidies are related to the cost of the 2nd least expensive Silver plan available in your states exchange. That doesn’t mean you should purchase this plan, simply that it is critical in determing the available subsidy. Your subsidy is determined as follows:
- Determine the Maximum Monthly premium you are responsible for based on your Federal Poverty Level (FPL table). This assumes you were to purchase our favorite plan the 2nd least expensive silver plan.
- Determine the cost of the 2nd least expensive silver plan
- Your subsidy is the difference between the Cost of the 2nd least expensive silver plan (step 2) and your Maximum Montly premium reponsibility based on the FPL table (step 1).
- That subsidy amount is available for any plan you select and you pay whatever premium is remaining.
If you were to select a Bronze plan, which would naturally be less than a Silver plan, then the actual premium you pay will be less that your Maximum montly premium determined in Step 1.
Conversely, if you were to select a Gold or Platinum plan, your premium reponsibility would be greater than your “Maximum” monthly premium.