About Subsidy Calculator
Premium and subsidy calculator for the Affordable Care Act (Obamacare)
Update (10/31/2015): This calculator has been updated with 2016 rates and formulas.
This Subsidy Calculator is based on formulas and regulations defined by the Affordable Care Act (ACA/Obamacare). The law created a system that provides financial help to low and middle income families in the form of a “subsidy.” Subsidies are primarily based on two criteria: your eligible “cap rate” and the cost of the “second cheapest Silver Plan” in your area.
The cap rate limits how much families have to pay for health insurance based on their income level relative to the official Federal Poverty Level (FPL). If an individual earns $25,000 a year, for example, they are at 200% of the FPL and their cap rate is then defined by the ACA to be 6.3% of their income, or $131 per month. Cap rates are based on your FPL.
To then determine the subsidy amount, the government covers all costs above the price of the “second cheapest silver plan” in your area. So in the example above if the second cheapest silver plan is $250 per month and your cap rate is $131 per month, the subsidy is then $119 per month. Note, if you choose a different type of plan, such as a Bronze or Platinum plan, your subsidy remains the same, $119.
State rates in this calculator are based on data published by HHS and a review of insurer rate filings to state regulators. Since most states have several rating areas each with varying rates, this calculator uses the rates from the largest populated city in their selected state. Age premiums were calculated using the 1:3 limit as defined in the law and insurers may charge extra for tobacco use and rates can be up to 50% higher than those shown.
For the tax penalty, 2.5% of income is taxed for 2015. However the minimum penalty is $695 plus $347.50 for each child up to $2085 per family. In each year, the penalty is capped based on the national average premium for bronze level insurance plans for single individuals and the number of people in the insurance unit. Specifically, the cap equals that average premium times the number of people up to a maximum of five.
This tool is for research purposes only. The results shown are estimates based on information provided by the user and our best efforts to provide accurate data. We try to keep the information up to date however we cannot make warranties about the accuracy of our information. We advise that users confirm any research with the respective health insurance companies and health exchanges. For information goto HealthCare.gov