The difference between credits and tax subsidies for health care

The difference between credits and tax subsidies for health care -

Comparing health plans comes down to many factors: franchises , co-insurance, incentives for wellness, and more. But one of the most important points of comparison for consumers who choose the coverage amounts to premium. This "the sticker price" means the amount that a person is responsible for paying out-of-pocket each month.

In an effort to help cushion some of the costs of health insurance premiums, co-pays and deductibles, the Affordable Care Act (ACA) established both credits and premium subsidies for the middle income consumers to lower that is the cause not to be able to offer some coverage levels. Here's what you need to know about credit and tax subsidies and how they differ.

The reform of health care tax credits

Most of the focus on the next health trade was tax credits, which are intended to reduce the monthly premium for individuals and families with incomes by up to 100 percent ($ 23.550 for a family of four) to 400 percent of the federal poverty level ($ 94,0 for a family of four in 2013). These tax credits will be immediately available for registered and payments of tax credits can go directly to insurers to cover part of the monthly health insurance premiums charged to eligible individuals.

This tax credit can be used to purchase one of four levels of "Metal plans" offered by the state market; including bronze, silver, gold and platinum. In general, the bronze level plans require the most comprehensive cost sharing (deductibles, co pays) while the platinum plans require the least.

sharing subsidy costs

Another type of financial aid for online market customers are cost-shared federal grants. The cost-sharing subsidies essentially increase the portion of benefits covered by an insurance company, which reduces outside pocket expenses for low-income consumers.

For individuals and families earning 250 percent or less of the federal poverty level ($ 58,875 for a family of four in 2013), subsidies can reduce deductibles, co-insurance, co-insurance and the total out pocket spending limits on a plane. These discounts are automatically applied as consumers qualify based on income and the purchase of a level plane of money. True, unlike the tax credit option to receive a cost-sharing grant; a person must buy a silver plane, also known as the reference scheme by law. Silver plans are one of four levels of plans sold through exchanges, each with a different level of sharing of costs

Warning :. Grants will be available for only network providers, which could leave some consumers with high costs to visit non-network providers.

to see if you may qualify for a tax subsidy, try the calculator health reform grant GoHealth and see an estimated tax credit and the premium you can expect to pay in 2014.

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