Author Topic: shrinking ACA subsidies  (Read 1427 times)

jamaicaspanish

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shrinking ACA subsidies
« on: November 07, 2019, 12:54:33 PM »
Just thought I would ask other mustachians if they are seeing similar numbers:

The good news:  our high-deductible HSA health insurance shows a minimal increase in cost for 2020.

The unbelievably bad news: our subsidy is being slashed.

We qualified for $800 / month in ACA subsidies for 2019
We qualify for $550 / month in ACA subsidies for 2020.

No change in income.
No change in location.
No change in insurance carrier.

The Colorado rep I just spoke to on the phone says subsidies have been cut for everybody by similar amounts.

World Trade Federation! 
How did I miss this news?

The first I found out about an increased $3k/ year health insurance cost was when the open enrollment window opened on Nov. 1.

Maybe I am missing something here.  Anybody in a similar situation with better information?

secondcor521

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Re: shrinking ACA subsidies
« Reply #1 on: November 07, 2019, 01:14:19 PM »
I was in a similar situation last year.

Your subsidy is calculated based on several numbers:

1.  Your family size.
2.  Your family's adjusted gross income.
3.  Your location.
4.  The second lowest cost silver plan in your area (aka the SLCSP).

(As an aside, your subsidy is *not* based on the insurance plan you choose, as long as you're choosing among the plans on the exchange.)

What has likely changed in your situation is item #4.  You can get an idea of what happened either by (a) talking with your state exchange people about silver plans in your state last year vs. this year, or (b) digging out your tax return from this year and looking at the SLCSP premium reported on your 1095 or on your Form 8962 and then going into shop for plans for next year, restrict the view to silver plans only, then sort by price and look at the second lowest cost plan.

What you're going to find out is the the SLCSP has changed in price by about $250 per month, which results in your subsidy changing by the same amount if everything else has stayed the same.

...

I suppose there is an outside chance that your state exchange has messed up your information.  You might want to call and confirm that they have the correct family size, income, and address.  My state went in and deleted two of my dependents this year, which I had to call in and have them reinstate.

jamaicaspanish

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Re: shrinking ACA subsidies
« Reply #2 on: November 07, 2019, 01:48:26 PM »
Thanks for the breakdown.
I think your analysis is correct.

Unfortunately for us (I know first-world problem), we need to have an HSA to stay under the ACA cliff. 

And the lowest-price plan with an HSA is what´s driving the cost.

I will contact the health exchange and talk to the most knowledgeable rep I can find.
tks again.


Frankies Girl

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Re: shrinking ACA subsidies
« Reply #3 on: November 07, 2019, 01:52:08 PM »
My subsidy is within $5 of last year. Nothing changed.

Cali4en

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Re: shrinking ACA subsidies
« Reply #4 on: November 07, 2019, 04:25:51 PM »
This is likely due to plan pricing in your local market.

We are in a similar situation to you (same exact plan, same income, same family numbers, same location) and our subsidy rose from $915 in 2019 to $989 in 2020.  Our net change in premium cost from 2019 to 2020 will be a reduction about $4 per month.

spartana

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Re: shrinking ACA subsidies
« Reply #5 on: November 08, 2019, 12:23:24 AM »
Sounds it may depend on your state. Calif is increasing it as well as upping it to 600% of FPL from the Fed's 400%. So many more people will be able to get subsidies (around 700k I believe). Other states are reducing them.

« Last Edit: November 08, 2019, 01:33:36 AM by spartana »

CCCA

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Re: shrinking ACA subsidies
« Reply #6 on: November 08, 2019, 12:36:02 AM »
I was in a similar situation last year.

Your subsidy is calculated based on several numbers:

1.  Your family size.
2.  Your family's adjusted gross income.
3.  Your location.
4.  The second lowest cost silver plan in your area (aka the SLCSP).

(As an aside, your subsidy is *not* based on the insurance plan you choose, as long as you're choosing among the plans on the exchange.)

What has likely changed in your situation is item #4.  You can get an idea of what happened either by (a) talking with your state exchange people about silver plans in your state last year vs. this year, or (b) digging out your tax return from this year and looking at the SLCSP premium reported on your 1095 or on your Form 8962 and then going into shop for plans for next year, restrict the view to silver plans only, then sort by price and look at the second lowest cost plan.

What you're going to find out is the the SLCSP has changed in price by about $250 per month, which results in your subsidy changing by the same amount if everything else has stayed the same.

...

I suppose there is an outside chance that your state exchange has messed up your information.  You might want to call and confirm that they have the correct family size, income, and address.  My state went in and deleted two of my dependents this year, which I had to call in and have them reinstate.


Wow, thanks for the useful info. 

jim555

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Re: shrinking ACA subsidies
« Reply #7 on: November 08, 2019, 05:13:45 AM »
Sounds like the second lowest cost silver plan (SLCSP) has changed, probably some new plan came in with lower rates dropping the SLCSP benchmark.

Monkey Uncle

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Re: shrinking ACA subsidies
« Reply #8 on: November 09, 2019, 03:14:09 PM »
Sounds like the second lowest cost silver plan (SLCSP) has changed, probably some new plan came in with lower rates dropping the SLCSP benchmark.

That's what happened to us.  A new provider came into our state's market, which caused the benchmark to drop.  Unfortunately, the new provider's plan is crap, so we have to stick with the old provider's plan, which now comes at a much higher effective cost.