Tuesday, January 21, 2014

“Hey, Doc” Explains Health Insurance Subsidies

We know health reform is big and confusing. Some parts of the law started in 2010. Other parts are rolling out over the next several years. Texas physicians and the Texas Medical Association have carefully studied the law to help you understand what the changes mean to your health care. 

As the Affordable Care Act (ACA) continues to roll out, Me&My Doctor’s “Hey Doc” series will answer your frequently-asked questions, as well as some you might not have thought to ask. 

Check out TMA’s past “Hey, Doc” segments.

Q. When can I receive the subsidies to help pay for my marketplace insurance? 

A. Remember that there are two kinds of subsidies you can get to help pay for your marketplace insurance, if you qualify (see “Who gets a subsidy?”). One is a tax credit that you can put toward your monthly premiums. The other is a break on the out-of-pocket of costs you are responsible for when you use your insurance.

When it comes to the tax credit, you have three choices: You can use the full credit right away to lower the cost of your monthly premiums for the year. You can choose to put part of the tax credit toward your premiums, and if there’s anything left over, you’ll get the difference back after you file your taxes. Or you can wait to get the entire tax credit refunded to you after you file your taxes. In the first two options, the federal government will take your tax credit and make the payment directly to the health plan for you.

The other subsidy helps lower your out-of-pocket costs, like deductibles, co-insurance, and co-pays. But it’s a little tricky. Remember the medals? The bronze, silver, gold, and platinum plans? In the bronze and silver plans, your monthly premiums are lower, but your out-of-pocket costs are higher. In gold and platinum plans, the opposite happens: They have higher premiums and lower out-of-pocket costs. This subsidy helps you get the out-of-pocket savings of a gold or platinum plan for the price of a silver one. So you would have to enroll in a silver plan to get the subsidy.

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