Real answers for your healthcare questions
How are Marketplace health insurance subsidies calculated?
Answer
Marketplace premium tax credits are calculated using factors such as household income, household size, the cost of a benchmark Marketplace plan, and applicable federal rules for the coverage year. The result is intended to reduce the amount an eligible household pays toward premiums.
What to Know
Your subsidy is not based only on the plan you choose. The Marketplace first determines the available tax credit, then you can generally apply some or all of it to an eligible plan. If your actual yearly income differs from what you estimated, the amount may be reconciled when you file federal taxes.
What to Do Next
Estimate income carefully and report changes during the year. Before choosing a plan, compare both the premium after the credit and the plan's deductible, network, prescriptions, and other out of pocket costs.
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