Call now for a quote: 855-435-8262

Q: Are Health Insurance Subsidies Based on This Year’s Income?

Asked by V. G. on February 6, 2018

Question: Are premiums based on 2017 or 2018's income? | Are premiums based on this year's income? | HealthCare.com Q&A

Hal Levy February 6, 2018

Your health insurance subsidy is based on your income for the current year. When asked about income, don’t use your information from last year.

Since the year isn’t over yet, this is always an estimate of your annual income. You’ll have to make your best guess as to how much you’ll make in the current year. If you’re having trouble, multiply your monthly income by twelve.

Don’t just put down last year’s income. However, that number could help you figure out what you’ll make this year.

What Is a Health Insurance Premium Subsidy?

You can get a huge discount on monthly premiums when you buy Affordable Care Act insurance on your own. This discount is based on your income. It’s called a premium subsidy, or a premium tax credit.

Premiums are the monthly payments you make to stay on an insurance plan. Subsidies are discount payments to you. In this case, the subsidies go directly to your health insurance plan, so that you pay lower premiums.

Where Do You Enter Your Income for Health Insurance?

To calculate your discount, HealthCare.com will ask for your income. (You may read this as annual household income, modified adjusted gross income, or yearly income – they’re all very similar.)

Your discount will be the same for all plans, even though their premiums are different. Some “silver” plans may include additional services for people who receive premiums.

Your premium subsidy is processed automatically. You don’t have to do the math or fill out paperwork to get it every month. It’s a popular feature that’s a part of all subsidy-eligible health plans.

What if My Estimated Income Is Wrong?

It’s OK if your estimated income is a little off! When you file taxes next year, you’ll square up with the government. If you underestimated your income, you’ll have to pay back a portion of the difference. If you overestimated your income, you’ll receive the subsidy that you didn’t get before.

Where Can I Calculate My Subsidy?

HealthCare.com has you covered. Our tool below will figure out your subsidy in under 2 minutes.

Get a Free Health Insurance Quote

  • Get an instant quote for health insurance plans
  • Compare prices from over 300 carriers
  • Find a plan that fits your budget
Please enter a valid US Zip Code

Thanks V.G.!

 

Have another answer for this question?

Share your knowledge using the form below.
Your email address will not be published.

By submiting an answer, you agree to our Terms of Use and Privacy Policy.
Your answer will be public once it's approved by our team.

Get Live Health Insurance Help Now