Everything You Need to Know About Obamacare Cost Assistance For 2021
We cover everything you need to know about cost assistance for 2021 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:
- Premium Tax Credits
- Cost Sharing Reduction Subsidies (Silver Plans only)
- Medicaid Expansion and CHIP
- HSAs (Health Savings Accounts) and Medical Deductions
Next, the chart below offers a quick overview of ObamaCare’s cost assistance options by “MAGI” income for 2021.
|Types of Cost Assistance For 2021||Individual Annual Income||Family of Four Annual Income|
|Medicaid health coverage (if your state decides to offer it)||Up to $17,775||Up to $36,570|
|Help to pay your premium (if you buy in your state’s online marketplace)||Between $12,760-$51,040||Between $26,200- $104,800|
|Subsidies for out-of-pocket costs (if you buy a Silver plan in your state’s online marketplace)||Between $12,760- $31,900||Between $26,200- $65,500|
NOTE: The Medicaid/CHIP amounts above apply from early 2021 to early 2022. Medicaid and CHIP eligibility is based on the current Federal Poverty Guidelines once published in the Federal Register each year. The Federal Register notice for the 2021 Poverty Guidelines was published on February 1st, 2021.
TIP: Want to find out what you can save quickly, check out our Subsidy Calculator.
The 2020 Federal Poverty Guidelines Used in 2021
Below are the 2020 Federal Poverty Guidelines that went into effect in early 2020. These guidelines are the key to all income-based cost assistance under the Affordable Care Act, specifically, these guidelines are used for:
- Medicaid/CHIP between Jan 2020 – Jan 2021 (see 2021 guidelines for Medicaid/CHIP limits for 2021).
- Cost assistance on all marketplace health plans held in 2021 and purchased during open enrollment for 2021 (which happens at the end of 2020)
- For special enrollment in 2021.
- For ACA taxes for the 2021 calendar year filed in 2022.
TIP: For mobile and smaller screen sizes, drag the table below to scroll and see the different poverty levels.
TIP: These tables will also be used for cost assistance for 2021 marketplace plans.
|2020 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|
|For families/households with more than 8 persons, add $4,480 for each additional person.|
FACT: The Federal Register notice for the 2020 Poverty Guidelines was published on January 17, 2020.
Details on Each Assistance Type
Below are details on each type of cost assistance for 2020
Medicaid and CHIP
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, $17,609 for an individual or $36,156 for a family of four for Jan 2020 – Jan 2021. 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 2021 you’ll use those for Medicaid and CHIP.
The Premium Tax Credit Subsidy Caps By Percentage of Household Income for SLCSP 2021
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.
Here are the Premium Tax Credit Subsidy Caps for 2021 from Rev. Proc. 2020-36:
NOTE: Section 9661 of the American Rescue Plan changed assistance amounts since March 2021. Please see the revised table below for updated 2021 caps.
Before American Rescue Plan Subsidy Cap Table 2021
|Less Than 133% FPL||2.07%|
|At least 133% but less than 150%||3.10% – 4.14%|
|At least 150% but less than 200%||4.14% – 6.52%|
|At least 200% but less than 250%||6.52% – 8.33%|
|At least 250% but less than 300%||8.33% – 9.83%|
|At least 300% but not more than 400%||9.83%|
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.
After American Rescue Plan Subsidy Cap Table 2021
NOTE: For 2021 – 2022, Section 9661 of the American Rescue Plan caps marketplace health insurance premiums. Not only does it provide lower caps for those who get subsidies through cost assistance, it also caps the premium that can be charged the benchmark plan at no more than 8.5% of household income. This means even without subsidies you won’t pay more than 8.5% of household income for a benchmark health plan.
|Less Than 150% FPL||0.00% – 0.00%|
|At least 133% but less than 150%||0.00% – 0.00%|
|At least 150% but less than 200%||0.00% – 2.00%|
|At least 200% but less than 250%||2.00% – 4.00%|
|At least 250% but less than 300%||4.00% – 6.00%|
|At least 300% but not more than 400%||6.00% – 8.50%|
|At least 400% and higher||8.50% – 8.50%|
Cost Sharing Reduction Subsidies 2021
Cost Sharing Reduction (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.
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
NOTE: For more information see a the 2021 Actuarial Value Calculator.
NOTE: Actuarial values are subject to change each year, the % numbers above may be adjusted before open enrollment.
Out-of-Pocket Maximums and Deductible Limits For 2021
- For 2021, your out-of-pocket maximum can be no more than $8,550 for an individual plan and $17,100 for a family plan before marketplace subsidies. These numbers have been revised up for 2021, they were slightly lower, $8,150 and $16,300 respectively in 2020.
- For 2021, your maximum deductible is the same as the out-of-pocket maximum.
TIP: See Notice of Benefit and Payment Parameters for 2021 for final levels.
Maximums and Deductibles on HSA-Eligible Plans in 2021
The maximum and deductible requirements for HSA qualifying plans are not the same as maximums and deductibles on health plans in general. Below are the HSA limits for 2021.
Minimum Deductible for HSA Eligibility
- Self-only: $1,400
- Family: $2,800
NOTE: The minimum deductible, which is the minimum deductible your High Deductible Health Plan must have after cost assistance.
Maximum Out-of-Pocket Limit for HSA Eligibility
- Self-only: $7,000
- Family: $14,000
NOTE: The maximum out-of-pocket is the highest maximum a plan can have to qualify for an HSA.
TIP: The maximums are slightly lower on HSA compatible plans than 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: $3,600
- Family: $7,200
NOTE: 55 plus can contribute an extra $1,000.
TIP: See Revenue Procedure 2020-32 for final HSA levels.
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 increased to 10 percent of your AGI. Thus, in 2021 the threshold is 10 percent of AGI.