So if you're eligible for the subsidies then the money you personally shell out for that health insurance won't be affected by the 20% rise in premiums. The formula for determining how much you pay is based on your income, not on the cost of that health insurance. The amount the government pays you for that health insurance is what changes, not what you personally pay out.
I might have it wrong, since my situation is slightly different between those 2 years. I've been targeting the <200% FPL bracket of subsidies and I thought I'd put in the same income for both years. Maybe I didn't. Thanks for pointing that out.
Honestly, this is confusing for me. This is my first year in the marketplace. Also my tax accountant, who also happens to be my brother, was not really helpful, because he deals with rich clients. So he's unfamiliar with that form 8962 for the premium tax credit, and maybe his tax software works doesn't work well with this form, or he simply didn't know how to use the software with respect to premium tax credits.
Nonetheless, I read Form 8962 instructions and it's accompanying publication and worksheets through very carefully.
And ultimately, my understanding is that the ACA protects the consumer by stating there is a maximum fixed % of income that can be spent on the cost for health insurance ( 9.5% of income )
My understanding (NOT AN EXPERT!!) is that the cap is for the 2nd lowest cost silver plan. I believe, but I am not 100% certain, if you were to buy any other plan, then there is no such guarantee. In other words, if you don't qualify for cost sharing and you want a different plan, the 9.69% cap (2017) may not apply. [Please correct me if I am wrong... I like to understand this stuff!]
So if you look at the Form 8962, the 2nd lowest cost silver plan helps delineate how much of a subsidy you will receive. From there, you apply that premium subsidy to any plan you choose, whether it is a bronze plan or a gold plan. You don't lose the 9.69% cap with respect to that "2nd lowest cost silver plan."
We may be saying the same thing in 2 different ways... but let me explain what I am saying with numbers from plans available to me.
Lets assume I am at
just under a bit under 400% FPL for a family of 2: $47,550 <- edit: I grabbed the wrong number for 400% FPL... but I think this number still illustrates my point.
9.69% of $47,550 is 4607.59.
The second lowest silver plan retails at 1037.10/month or $12,445/year
This gives a subsidy (based on the 9.69% cap) of: 12,445 - 4607 = 7838
What I was saying is: It is not true that 9.69% (4607.59) is the maximum that can be spent on health insurance. That number is just used to figure out the subsidy.
If I were to pick a plan other than the second lowest cost silver, it might be more than that.
For example, there are 2 providers in my area. If I choose the silver plan that costs $1343.57 a month ($16,122/year) ... and I apply the subsidy: 16,122 - 7838 = $8284/year.
$8284 is 17.4% of my income.
In other words: Yes, you can find a plan that will hit the 9.69% cap... but NOT ALL PLANS hit the 9.69% cap. If an insurance company were to price the 2nd lowest cost silver very low and other plans high relative to that plan, you're possibly going to be out more than 9.69%. (In my area, there are bronze plans that come out above 10% after subsidy... it all depends on the plan you choose.)