According to CNN, “subsidies are based on a formula set by law, applying to individuals with annual incomes of one to four times the poverty level—or $11,490 to $45,960.” And to calculate the subsidies, “the government sets a maximum amount that low-income customers will have to pay for insurance as a percentage of their income. That cap is then subtracted from the cost of a mid-level insurance plan in the individual’s region, and the difference is their subsidy.”
And though insurance companies are required to “knock that amount off the price of premiums before the customer pays,” the subsidy is “zero” if the baseline plan insurance plans are cheap enough. That means many low-income younger Americans who are forced to buy insurance are discovering, to the surprise of many, that they will have to do so without the subsidies they were promised, as CNN noted:
In Chicago, a 27-year old will receive no subsidy to help offset premiums of more than $165 a month if he makes more than $27,400 a year.
In Portland, Oregon, subsidies for individuals making just $28,725 a year phase out for those younger than 35 years old.
In Nashville, a 25-year old making $25,500 will not qualify for a subsidy.
In Minneapolis, Minnesota, a 4o-year old making $28,725 a year will not get a subsidy.
In Colorado most young people will receive little subsidy if they make over $26,000/year and no subsidy if they make over $30,000 per year. The exception is the resort areas, where subsidies will be available up to the 400% FPL limit.