If the health plan I choose costs less than the monthly tax credit I am eligible for, will I get whatever I don't use as tax credit?

I will receive a $201/month tax credit when I sign up for health insurance through the Exchange; if the plan I choose costs less than $201/month, will I still get a tax credit for the amount I don't use (i.e. is it worth it to sign up for coverage that will use the full $200/month)? If my plan is only $160/month, will I get $41/month in tax credit?

    Cancel

    Most people use the terms "Premium Tax Credit" and "Subsidy" to mean the same thing as it related to premium costs. However, there are other types of subsidies (not widely known) that make Silver Plans attractive. See this:

    http://www.huffingtonpost.com/nathan-newman/obamacares-secret-subsidi_b_4078125.html

      Cancel

      I have also been looking at the difference between a bronze plan where I would owe nothing out of pocket (with a substantial tax credit paid from the govt to the insurance company)  and a silver plan where I would owe approx $28- per month. The huge difference in the deductibles has me leaning towards the silver plan even though I really can't afford it. 

      I also projected the annual cost to me $30 x 12months =$360 yr. vs. the possible penalty:  If my income for 2014 is 28k…… a 1% penalty would cost me $280- at tax time..  so the difference really would be $80- only!?  Sounds like smart spending to use the entire projected subsidy and pay something inorder to be on the silver plan so that we would be somewhat protected from accidents and god forbid serious illness. Even so, I have not yet purchased the silver plan. Won't help me get to the dentist, though.  

      • Well, once again I went back to the CT "access health " website  but can find nothing about the additional 'subsidy'/or rule to limit out of pocket costs. The info from California does look like it would be something great but not for CT. Perhaps this is an additional federal rule?  or an option that California decided to offer?
      • The "cost-sharing reductions" are for the entire country.  It applies to people/families that are between 100% and 250% of the Federal Poverty Level.  It ONLY applies to the Silver plan.

        Somebody else told me that if you qualify it just automatically changed the Silver plans for the "cost-sharing reductions" and didn't specifically point out that they were receiving them.  If you look through the Silver plans and all of the out-of-pocket maximums are less than $6350 (single)/$12,700 (family), then the "cost-sharing reductions" are probably already being applied.
      • hmm… I think this may be correct that the "cost sharing reductions"  have been included for the silver plans, - It takes quite a few switches and re-sign-ins to see any of the out of pocket costs of a particular plan's co-pay schedule of visits to the doctor / prescriptions/ lab work/..and I think I can only see that level of detail one plan at a time.  So it is very time consuming to compare the real details of the plans. It's sort of annoying that a disclosure about 'cost sharing' is not explained. Although, the website does 'push' you toward the silver level as being the best deal.

        As with almost all tax and IRS confusions there is accurate vocabulary to be standardized and publicized and learned!

         I am really hoping I come out ahead, and that the ammount I do actually spend/ or the services provided  is well worth the out of pocket cost. If dental care were included I would be so much happier.  The dental plans available (not subsidised) seem a horrible waste of money no matter how you add it up. Eye care is just for the exam, and dosen't offer anything I don't think for the glasses.
         Part of the whole point of health insurance is to prevent bankruptcy but with the annual maximum out of pocket so steep!  Surely for anyone within the range of the poverty chart (s) income $12,700 is a huge ammount of money!  

         Two other points : the cost of the penalty:
        here is what is posted at "ConnectiCare.com": Coverage requirement:
        Starting January 1, 2014, all U.S. citizens and legal residents must have health care coverage. If you do not, you could face a penalty unless you qualify for an exemption.
        The penalty in 2014 will be $95, or 1 percent of your household income, whichever is higher.
        The penalty in 2015 will be $325, or 2 percent of your household income, whichever is higher.
        In 2016 and beyond, going without insurance can cost you $695 or 2.5 percent of your household income.

        and somewhere? That GAINING a job  that offers health insurance allows you to change healthcare providers ( a 'life change' event).

         So for now, tentative plan is to consider where I can squeeze out the approx $360 per year to pay for the coverage and be sure to use covered services at or beyond that price point. And somehow make it to the dentist. :)
      Cancel
      Contribute an answer

      People come to TurboTax AnswerXchange for help and answers—we want to let them know that we're here to listen and share our knowledge. We do that with the style and format of our responses. Here are five guidelines:

      1. Keep it conversational. When answering questions, write like you speak. Imagine you're explaining something to a trusted friend, using simple, everyday language. Avoid jargon and technical terms when possible. When no other word will do, explain technical terms in plain English.
      2. Be clear and state the answer right up front. Ask yourself what specific information the person really needs and then provide it. Stick to the topic and avoid unnecessary details. Break information down into a numbered or bulleted list and highlight the most important details in bold.
      3. Be concise. Aim for no more than two short sentences in a paragraph, and try to keep paragraphs to two lines. A wall of text can look intimidating and many won't read it, so break it up. It's okay to link to other resources for more details, but avoid giving answers that contain little more than a link.
      4. Be a good listener. When people post very general questions, take a second to try to understand what they're really looking for. Then, provide a response that guides them to the best possible outcome.
      5. Be encouraging and positive. Look for ways to eliminate uncertainty by anticipating people's concerns. Make it apparent that we really like helping them achieve positive outcomes.
      Cancel