KFF ACA subsidy calculator versus state exchange

[ysette9]

We are doing some Roth conversion and ACA subsidy planning for this year and next. I'd like to build a table of ACA subsidies, plan costs, and income for 2024 to play around with. (We are already signed up as a renewal for a Bronze plan, continuing our 2023 coverage).

For whatever reason the Washington state exchange isn't giving me any information on subsidy and cost at different income levels. Granted, the site sort of sucks and is difficult to navigate, but usually I can force it to give me info. That said, I pulled up the Kaiser Family Foundation estimator that everyone always recommends. (https://www.kff.org/interactive/subsidy-calculator/) The issue is that the KFF estimator tool is wildly off from the reality of what my state's exchange prices are, even when I specify our zip code.

As an example, in 2024 we will pay $713.55 for a family of 5 on a Bronze plan with a subsidy of $775, estimated yearly income of $125k. If I put these family members and yearly income into KFF's tool, it tells me a Bronze plan would cost $327 a month with a $786 subsidy.

The subsidy estimate isn't the same, but is fairly close. The actual cost for us from the Washington health exchange site is wildly off from the KFF estimator. Does anyone have an idea on why it is so off? The KFF interface is significantly better than the WA health exchange site, which is why I'd like to be able to use it if it gave good info.

[MDM]

Does the subsidy differ from what you calculate on Form 8962 when you file your federal taxes?

[seattlecyclone]

How to calculate your subsidy:
1) Figure out your income as a percentage of the poverty level. For example $125k is 356% of the five-person poverty level used for ACA healthcare in 2024.
2) Find the "applicable figure" for that income in the lookup table for Form 8962. For example this figure is 7.40% for someone at 356% of the poverty level.
3) Multiply this figure by your income. $125k * 7.4% = $9,250, or $770.83/month.
4) Look up the unsubsidized cost of the second-cheapest silver plan in your area for your family members who will be buying Exchange coverage. For example when I search for plans in King County for a couple of 40-year-olds with 8-year-old triplets, I find the second-cheapest silver plan is "Ambetter Cascade Select Silver" at $1,515.97/month.
5) Subtract the figure from Step 3 from the cost in Step 4. $1,515.97 - $770.83 = $745.14. This is your subsidy amount that can be applied to any plan (with the caveat that plans with unsubsidized cost less than $745.14 will just go down to zero; you won't be paid to take them).

Incidentally when I put an income of $125k in for this example family in the "Browse and Compare plans" interface on the WA health plan finder site just now, it gave me an estimated tax credit subsidy of $745, exactly the same as in the calculation above. What are you seeing differently that causes you to doubt the site's accuracy?

[ysette9]

I think the question isn't so much on the subsidy, as the KFF tool and the WA health finder tool pretty much agree there. The issue is that the estimated cost that we would pay after the subsidy is wildly different. Clearly the WA health finder tool is correct as it is the official health exchange. I am surprised to see the KFF tool so far off as KFF usually is a reliable source.

[seattlecyclone]

The accuracy of the KFF site will be limited to what data they have available. They do seem to have the data points for the actual cost of the second-cheapest silver plan, as it seems to match exactly for the cost of this plan and the subsidy that is calculated based on this cost.

Also when I typed in this example family (two 40-year old adults, three 8-year-old children, $125k income), the KFF site quotes a bronze plan cost of $339/month after subsidies, which happens to exactly match what I see on the WA health plan finder site if you look at the cheapest bronze plan ("Ambetter Essential Care 1"). KFF doesn't seem to be making any attempt to show you all the plan options available, or even tell you the names of the plans they're using. They just tell you what the second-cheapest silver plan will cost and what the cheapest bronze plan will cost.

The WA site shows 21 bronze plans in King County, with subsidized premiums all over the map for this example family: all the way from $339/month for the cheapest Ambetter plan to $1,283/month for the most expensive Premera plan. The plan you currently have must be somewhere in the middle.

[ysette9]

Thank you, I think this is the root of my issue. I can't remember the details now of why I went with "Cascade Bronze" when I was shopping Bronze plans, but I did, and it isn't the cheapest out there. I was surprised just how many "Bronze" plans there were, with plenty of differences in features and cost. I naively thought that a Bronze plan was a Bronze plan.

The accuracy of the KFF site will be limited to what data they have available. They do seem to have the data points for the actual cost of the second-cheapest silver plan, as it seems to match exactly for the cost of this plan and the subsidy that is calculated based on this cost.

Also when I typed in this example family (two 40-year old adults, three 8-year-old children, $125k income), the KFF site quotes a bronze plan cost of $339/month after subsidies, which happens to exactly match what I see on the WA health plan finder site if you look at the cheapest bronze plan ("Ambetter Essential Care 1"). KFF doesn't seem to be making any attempt to show you all the plan options available, or even tell you the names of the plans they're using. They just tell you what the second-cheapest silver plan will cost and what the cheapest bronze plan will cost.

The WA site shows 21 bronze plans in King County, with subsidized premiums all over the map for this example family: all the way from $339/month for the cheapest Ambetter plan to $1,283/month for the most expensive Premera plan. The plan you currently have must be somewhere in the middle.

[seattlecyclone]

I was surprised just how many "Bronze" plans there were, with plenty of differences in features and cost. I naively thought that a Bronze plan was a Bronze plan.

Yeah they can vary quite a lot in price! The one thing that ties these plans together is a 60% "actuarial value," meaning the plans are designed to pay 60% of their members' aggregate medical bills for covered services. How they arrive at that number is up to them. Some have a very high deductible but cover pretty much everything after you meet the deductible, while others have a lower deductible but higher out-of-pocket maximum. The physician networks can differ, and I'd guess this is the biggest driver behind the differing costs. After all, if the $1,000/month (unsubsidized) plan and the $2,000/month (unsubsidized) plan both pay 60%, and they both have a similar profit margin, the cheaper plan is probably paying fewer, cheaper claims than the more expensive plan. Maybe they leave the most expensive providers out of their network, maybe the providers they do have in-network are booked up far enough out that people often go out-of-network to get care in a timely manner, maybe they deny lots of claims knowing that most people won't have the tenacity to appeal, or a combination of all of these factors.

[ysette9]

The US health system is so messed up. I'm voting in the camp that says healthcare shouldn't be a profit center.

Thanks for the clarification and input.