Monday, November 04, 2013

Health Insurance Subsidy Cliff

A friend of mine is making sure that he earns less than 400% the federal poverty level so that he qualifies for the health care insurance subsidy.  Otherwise, he will need to pay 100% more than  his current insurance policy premium  for essentially the same coverage.  Earning $1 over the threshold will require him to pay a month's income more in health insurance premium.  For him, it doesn't make sense to earn more than the threshold.

Apparently, this phenomenon is not limited to my friend as shown is this San Francisco Chronicle article.  Retirees and small business owners will be considering options that will enable them to keep income below the thresholds and avoid the health insurance subsidy cliff.

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This is not financial or insurance advice. Please consult a professional advisor.

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2 comments:

Betsy @ ConsumerFu said...

We live in one of those states that didn't create its own marketplace, so we have one provider and no competition. Rates are sometimes 3x what they were previously. Guess that's what you get with no competition.

Super Saver said...

Sorry to hear about the price shock in your state. Once the government got involved, I expected prices to go up, but 3X is outrageous.