Everything You Need to Know About Obamacare Cost Assistance For 2023

We cover everything you need to know about cost assistance for 2023 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 2023 all in one page.

Types of Assistance

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

Next, the chart below offers a quick overview of ObamaCare’s cost assistance options by “MAGI” income for 2023.

Types of Cost Assistance For 2023 Individual Annual Income Family of Four Annual Income
Medicaid health coverage (if your state decides to offer it) Up to $18,754* Up to $38,295*
Help to pay your premium (if you buy in your state’s online marketplace) Between $13,590-$54,360 Between $27,750- $111,000
Subsidies for out-of-pocket costs (if you buy a Silver plan in your state’s online marketplace) Between $13,590- $33,975 Between $27,750- $69,375

NOTE: Medicaid/CHIP eligibility will be updated when the new Federal Poverty level data is published in early 2023.

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

The 2022 Federal Poverty Guidelines Used in 2023

Below are the 2022 Federal Poverty Guidelines that went into effect in early 2022 (the ones you use for 2022 Medicaid/CHIP and for 2023 marketplace cost assistance).[1]

These guidelines are the key to all cost assistance under the Affordable Care Act. Specifically, these guidelines are used for:

  • Medicaid/CHIP between late Jan 2021 – Jan 2022 after the poverty level guidelines are published.
  • 2022 marketplace cost assistance on all marketplace health plans held in 2022 and purchased during open enrollment for 2022 (which runs from November 1, 2021, to December 15, 2021, and which uses the 2021 levels).
  • For special enrollment in 2022.
  • For ACA taxes for the 2022 calendar year filed in 2023.

NOTE: Our federal poverty guideline list has the 100% poverty level. To find a % level, simply multiply. For example, to find the 138% level for an individual (the 100% level for a family of 1 as shown in the table below), multiply $13,590 x 1.38.

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

2022 Poverty Guidelines for the 48 Contiguous States and the District of Columbia

Persons in family/household Poverty guideline
1 $13,590
2 18,310
3 23,030
4 27,750
5 32,470
6 37,190
7 41,910
8 46,630

For families/households with more than 8 persons, add $4,720 for each additional person.

NOTE: Alaska and Hawaii use different guidelines (see this link to guidelines as published in the Federal Register).

FACT: The Federal Register notice for the 2023 Poverty Guidelines was published on January 21st, 2022.

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, $18,754.20 for an individual or $38,295.00 for a family of four for Jan 2022 – Jan 2023. 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 2023 you’ll use those for Medicaid and CHIP.

The Premium Tax Credit Subsidy Caps By Percentage of Household Income for SLCSP 2023

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 2023 percentages range from 1.92% to 9.12% (an increase from the 2022 range of zero to 8.5%).

Here are the Premium Tax Credit Subsidy Caps for 2023 from Rev. Proc. 2022-34:

NOTE: For 2021 – 2022, Section 9661 of the American Rescue Plan capped marketplace health insurance premiums. Not only did it provide lower caps for those who got subsidies through cost assistance, it also capped the premium that can be charged the benchmark plan at no more than 8.5% of household income. This means even without subsidies you couldn’t pay more than 8.5% of household income for a benchmark health plan. For 2023, the amount is capped at 9.12%.

Income 2023
Less Than 150% FPL 1.92% – 1.92%
At least 133% but less than 150% 1.92% – 1.92%
At least 150% but less than 200% 2.88% – 3.84%
At least 200% but less than 250% 3.84% – 6.05%
At least 250% but less than 300% 6.05% – 7.73%
At least 300% but not more than 400% 7.73% – 9.12%
At least 400% and higher 9.12% – 9.12%

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. However, please note, those who aren’t eligible for Medicaid expansion who are on unemployment can get marketplace assistance under the American Rescue Act.

Cost Sharing Reduction Subsidies 2023

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 the 2022 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 2023

Each year the ACA sets new limits for out-of-pocket maximums and deductibles. Here are the limits for 2023 plans for individuals and families.

  • $9,100 for self-only coverage ($8,700 in 2022)
  • $18,200 for family coverage ($17,400 in 2022)

NOTE: For 2023, your maximum deductible is the same as the out-of-pocket maximum.

NOTE: The individual limit applies to each individual in the plan. Thus, for 2023, even though the family limit is $18,200, no one member can occur more than $9,100 in covered expenses before the maximum is reached for that member.

NOTE: See Notice of Benefit and Payment Parameters for 2023 for final levels.

Maximums and Deductibles on HSA-Eligible Plans in 2023

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 2023.

HSA Chart for 2023

First off, here is an easy-to-read 2023 HSA chart that sums up HSA minimums, maximums, and limits. See detailed information below.

2023 Minimum Deductible Maximum Out-of-Pocket Contribution Limit 55+ Contribution
Single $1,500 $7,500 $3,850 +$1,000
Family $3,000 $15,000 $7,750 +$1,000
FACT: HSA’s aren’t “use it or lose it.” The money that you put in an HSA goes in tax-free. You can keep it, invest it, use it tax-free on medical expenses, withdraw funds from it at a fee, and roll it over into a retirement account when you are ready for Medicare. Only FSA’s, the kind of health savings account you get through your employer, is “use it or lose it.”

Minimum Deductible for HSA Eligibility 2023

  • $1,500 for self-only coverage ($100 increase from 2022)
  • $3,000 for family coverage ($200 increase from 2022)

NOTE: $3,000 for embedded individual deductible ($100 increase from 2022)

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 2023

  • $7,500 for self-only coverage ($450 increase from 2022)
  • $15,000 for family coverage ($900 increase from 2022)

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 2023

  • $3,850 for self-only coverage ($200 increase from 2022)
  • $7,750 for family coverage ($450 increase from 2022)

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

TIP: See Rev. Proc. 2022-24 for final HSA levels.

The Medical Expense Tax Deduction for 2023

Medical expenses are deductible if they exceed 7.5% of your AGI (adjusted gross income), although certain rules apply. This number as bounced between 7.5% and 10% in recent years, but is 7.5% for the 2023 tax year.

Citations

  1. A Notice by the Health and Human Services Department on 01/21/2022. Federalregister.gov.