Will I qualify for lower costs on monthly premiums?

When you get health insurance coverage in the Marketplace, you may be able to get lower costs on monthly premiums. This depends on your income and family size.

Pay lower costs for premiums each month

In the Health Insurance Marketplace you may be able to lower the costs of your health insurance coverage by paying lower monthly premiums. You’ll see the amount of savings you’re eligible for when you fill out your Marketplace application. Prices shown for insurance plans will reflect the lower costs.
These lower costs are handled with a tax credit called the Advance Premium Tax Credit. But these tax credits can be applied directly to your monthly premiums, so you get the lower costs immediately.

Get an estimate of your costs and savings

You can get a rough estimate of costs and savings by using the Kaiser Family Foundation calculator.

Savings depends on income and family size

The amount you save depends on your family size and how much money your family earns. In general, if your income falls within the following ranges you’ll qualify to save money on your premiums in 2014. The lower your income within these ranges, the more you’ll save. (The amounts below are based on 2013 numbers and are likely to be slightly higher in 2014.)

  • $11,490 to $45,960 for individuals
  • $15,510 to $62,040 for a family of 2
  • $19,530 to $78,120 for a family of 3
  • $23,550 to $94,200 for a family of 4
  • $27,570 to $110,280 for a family of 5
  • $31,590 to $126,360 for a family of 6
  • $35,610 to $142,440 for a family of 7
  • $39,630 to $158,520 for a family of 8

If your income falls below the amounts shown, you may qualify for coverage under your state’s Medicaid program. But if your state is not expanding Medicaid in 2014–and you don’t qualify for Medicaid under your state’s rules–you can’t get lower costs on Marketplace coverage based on your income. You’d have to pay the entire cost of a Marketplace insurance plan.

Estimating your income

When you apply for lower costs in the Marketplace, you’ll need to estimate your income for 2014.
You can start by adding up the following items for:

  • You and your spouse, if you are married and will file a joint tax return
  • Any dependents who make enough money to be required to file a tax return

For each of the following sources, estimate what your income will be in 2014:

  • Wages
  • Salaries
  • Tips
  • Net income from any self-employment or business (generally the amount of money you take in from your business minus your business expenses)
  • Unemployment compensation
  • Social Security payments, including disability payments–but not Supplemental Security Income (SSI)
  • Alimony

Other items to include when estimating your 2014 income are: retirement income, investment income, pension income, rental income, and other taxable income such as prizes, awards, and gambling winnings.DON’T include the following:

  • Child support
  • Gifts
  • Supplemental Security Income (SSI)
  • Veterans’ disability payments
  • Workers’ compensation

For more information on reporting your income, see IRS Publication 525.

Modified adjusted gross income and household income

When you fill out the Marketplace application, your estimated household income will be calculated using the information you provide. Your household income determines your eligibility for lower costs on Marketplace coverage.
Your household income is your modified adjusted gross income (MAGI) (joint MAGI if you’re married), plus the MAGI of your dependents who make enough money to have to file a tax return.
MAGI is generally your adjusted gross income plus any tax-exempt Social Security benefits (except for Supplemental Security Income (SSI), which is not counted), tax-exempt interest, and tax-exempt foreign income.
You don’t have to figure out your household income or MAGI yourself when you fill out your application. It will be done for you with the income information you include on the application.