Supporters of the Affordable Care Act often remind critics about the subsidies that help limit the costs of health insurance for people with ACA plans. (They downplay the fact that someone other than the user ends up footing the bill. Subsidies lower the price for the consumer but have no positive impact on overall costs.)
But Ali Meyer of the Washington Free Beacon factors subsidies into her recent review of the impact of recent ACA price increases.
Young singles in their twenties earning an annual salary of $30,000 or more will pay at least $2,484 a year in Obamacare premiums even after receiving tax credits from the federal government, according to the Kaiser Family Foundation’s health insurance marketplace calculator.
The calculator estimates the cost of health insurance premiums and subsidies for individuals purchasing Obamacare silver plans by considering various metrics including income, age and family size.
For a single, non-smoking adult aged 21 to 29 with no dependents, the U.S. average premium for those making an annual salary of $30,000 is $207 a month, or $2,485 annually, even after receiving subsidies from the federal government.
For individuals in this demographic who are between 21 and 26 years of age, the tax subsidies stop after one earns a salary of $36,000 or more, meaning the cost of premiums would increase to $282 a month, or $3,384 a year.
In its announcement confirming that Obamacare premiums would go up by double digits, the Obama administration said tax credits would help ease economic pain caused by the increases.
“Eighty-five percent of current Marketplace consumers receive tax credits that bring down the cost of coverage, and, nationwide, about the same percentage of Marketplace-eligible uninsured Americans also have incomes that could qualify them for tax credits,” the Department of Health and Human Services said. “Tax credits increase dollar-for-dollar with the cost of a consumer’s benchmark plan, so they protect the large majority of consumers from rate increases.”
Still, many young adults will pay substantial premiums despite the tax credits, and some may decide to pay a fine to the IRS and forego insurance altogether.
