Monthly Archives: December 2013

“Secret” benefit of the Affordable Care Act

As crazy as the content and history and implementation of the Affordable Care Act (ACA) are, it’s a very valuable law that will save lives and family finances. It’s easy for many to disdain because it doesn’t heavily affect most people in the US. It’s targeted mainly to help those who have been left out of the 70-year old employment-based health care system — you know, the one where when you lose your job, health care becomes capricious and/or unaffordable. In addition to the aspects that benefit everyone without job-related care, ACA will give extra help to the many, many people who earn up to 4 times the Federal Poverty Level, thus reaching deep into the lower earning, hard working families who can’t afford adequate medical care.

I just discovered a major but inexplicably unpublicized benefit of ACA that applies to every family who estimates their Modified Adjusted Gross Income (MAGI) during a plan year won’t exceed 2.5 times the Federal Poverty Level (FPL), i.e. the large, important group who earn OK, but for whom every dollar is crucial.

On top of the insurance premium subsidy everyone’s aware of, this group is entitled to Cost Sharing Subsidies that substantially reduce the plan’s out of pocket costs, too! You have to make the right choices to get it and, on the NYS exchange for example, it’s not even mentioned. So even those who have chosen a plan may want to use the 90-day grace period to switch if it saves them money.

Incidentally, the MAGI definition — crucial to ACA eligibility — allows some very valuable income deductions that let you lower your effective income, which might make you eligible for a better deal.

This law, like any massive and complex legislation, needs a lot of fine tuning and error correction, but that won’t happen as long as Republicans are intent on making it fail. Keep in mind that even the inexcusable website problems were only so important and damaging because so many state governments refused to set up their own online exchanges, as part of their vicious campaign to torpedo the whole ACA before it got off the ground.

Since many people don’t realize their MAGI might be below 250% FPL, here are the figures:

Household Size 250% of 2013 FPL
1 $28,725
2 $38,775
3 $48,825
4 $58,875
Each additional Add $7,050