Everything You Need to Know about Obamacare Cost Assistance For 2020

We cover everything you need to know about cost assistance on 2020 health plans under the Affordable Care Act (ObamaCare).

In other words, here is everything you need to know about Premium Tax Credits, Cost Sharing Reduction Subsidies, Medicaid and CHIP, HSAs, and Medical Deductions for plans purchased during open enrollment 2020 all in one page.

Types of Assistance

First off, the types of assistance offered under the Affordable Care Act are:

TIP: Want to find out what you can save quickly, check out our Subsidy Calculator.

The 2019 Federal Poverty Guidelines Used in 2020

Below are the 2019 Federal Poverty Guidelines that went into effect in early 2019. These guidelines are the key to all cost assistance under the Affordable Care Act, specifically these guidelines are used for:

  • Medicaid/CHIP between Jan 2019 – Jan 2020.
  • 2020 marketplace cost assistance on all marketplace health plans held in 2020 and purchased during open enrollment for 2020 (which runs from Thursday, November 1, 2018, to Saturday, December 15, 2018, and which uses the 2019 levels).
  • For special enrollment in 2020.
  • For ACA taxes for the 2020 calendar year filed in 2021.

TIP: For mobile and smaller screen sizes, drag the table below to scroll and see the different poverty levels.

2019 POVERTY GUIDELINES FOR THE 48 CONTIGUOUS STATES AND THE DISTRICT OF COLUMBIA
Persons in Family/Household 100% FPL: Minimum to Qualify for ACA Assistance 138% FPL: Medicaid Cap (in States that Expanded) 250% FPL: CSR Subsidies Cap 400% FPL: Premium Tax Credit Cap
1 $12,490 $17,236 $31,225 $49,960
2 $16,910 $23,336 $42,275 $67,640
3 $21,330 $29,435 $53,325 $85,320
4 $25,750 $35,535 $64,375 $103,000
5 $30,170 $41,635 $75,425 $120,680
6 $34,590 $47,734 $86,475 $138,360
7 $39,010 $53,834 $97,525 $156,040
8 $43,430 $59,933 $108,575 $173,720
For families/households with more than 8 persons, add $4,420 for each additional person.

NOTE: Alaska and Hawaii use different guidelines (see this link to guidelines as published on HHS.Gov).

Details on Each Assistance Type

Below are details on each type of cost assistance for 2020

Medicaid and CHIP for Jan 2019 – Jan 2020

In all states that expanded Medicaid adults making below 138% of the poverty level qualify for Medicaid . Other states have unique eligibility. CHIP eligibility tends to be higher but differs by state.

You can sign up for Medicaid and CHIP 365 days a year.

You may qualify for free or low-cost care for Medicaid based on income and family size if you make 138% of the poverty level or, for example, $17236.20 individual or $35,535 for a family of four in for Jan 2019 – Jan 2020. Specifics may differ by state.

Contact your state Medicaid office or use the marketplace for details.

TIP: Starting in late Jan / early Feb each year new guidelines are published. After the new guidelines are published in 2020 you’ll use those for Medicaid and CHIP.

The Premium Tax Credit Subsidy Caps By Percentage of Household Income for SLCSP 2020

Premium tax credits are tax credits that can be taken in advance as Advanced Premium Tax Credits or at tax time as Premium Tax credits (or you can do a mix). Premium tax credits cap premium spending for a family based on MAGI income compared to the federal poverty level and are based on the cost of the second lowest silver plan (SLCSP) in a state’s Marketplace. To qualify you must purchase a marketplace plan.

The chart below shows the minimum and maximum percentage of the household income that a person will pay for that plan. The amount you’ll pay is based on your household income (compared to the federal poverty level) and is adjusted based on the price of the plan chosen.

The premium tax credit caps for 2020 work this [please note the figures below are the 2019 percentages, we are waiting on the 2020 percentages]:

  • Less than 133%, then the initial percentage is 2.08% and the final percentage is 2.08%;
  • At least 133% but less than 150%, 3.11% and 4.15%;
  • At least 150% but less than 200%, 4.15% and 6.54%;
  • At least 200% but less than 250%, 6.54% and 8.36%;
  • At least 250% but less than 300%, 8.36% and 9.86%; and
  • At least 300% but not more than 400%, 9.86% and 9.86%.

NOTE: To qualify for tax credits you must make between 100% – 400% of the poverty level (FPL). If your state expanded Medicaid you will be eligible for Medicaid instead of tax credits below 133% (or 138% adjusted) FPL.

Cost Sharing Reduction Subsidies 2020

CSR subsidies reduce your out-of-pocket expenses on silver plans purchased through the health insurance marketplace for those with incomes between 100% – 250% of the poverty level.

CSR subsidies lower your coinsurance, and lower copays, deductibles, and maximum out-of-pocket costs you will pay in a policy period.

NOTE: Actuarial values are subject to change each year, the % numbers below may be adjusted before open enrollment. We will update when the numbers are finalized.

There are three levels of CSR subsidies: CSR 73, CSR 87, and CSR 94. The numbers refer to the actuarial value (AV). Benefits sheets will include different summaries for different CSR levels. Please note values may adjust each year.

Income Level Actuarial Value (the costs a Silver plan will cover due to cost-sharing reduction subsidies for % of the Poverty Level).

100-150% FPL = 94% Actuarial Value (CSR 94)

150-200% FPL = 87% Actuarial Value (CSR 87)

200-250% FPL = 73% Actuarial Value (CSR 73)

More than 250% FPL = 70% Actuarial Value

Out-of-Pocket Maximums and Deductible Limits For 2020

Each year the ACA sets new limits for out-of-pocket maximums and deductibles. Here are the limits for 2018 plans for individuals and families.[1]

  • For 2020, your out-of-pocket maximum can be no more than $8,150 for an individual plan and $16,300 for a family plan before marketplace subsidies.
  • For 2020, your maximum deductible is the same as the out-of-pocket maximum.

TIP: See Notice of Benefit and Payment Parameters for 2020 for final levels (they were slightly higher, $8,200 and $16,400 respectively, but then revised down in the final rule).

Minimum Deductible for HSA Eligibility

  • Self-only: $1,400
  • Family: $2,800

Maximum Out-of-Pocket Limit for HSA Eligibility

  • Self-only: $6,900
  • Family: $13,800

TIP: The maximums are slightly lower on HSA compatible plans then they are in general on health plans. This has to do with the fact that the rates are raised by different mechanisms. The difference allows for non-HSA compatible high deductible plans. Thus, if you want an HSA, make sure your plan is “HSA Eligible.”

HSA Contribution Limit for 2020

  • Self-only: $3,550
  • Family: $7,100

NOTE: 55 plus can contribute an extra $1,000.

TIP: See Revenue Procedure 2019-25 for final HSA levels.

Medical Deductions

For 2017 and 2018, medical expenses were deductible if they exceed 7.5 percent of your AGI (adjusted gross income). For 2019 forward, this threshold was increase to 10 percent of your AGI.