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How Much Will Obamacare Cost You?

The year 2014 is fast approaching. And with the new year, you will be required to purchase health insurance if you don’t already have it. If you can’t get insurance through your work, you’ll be able to purchase a plan on the health insurance exchanges that should be offered starting in 2014 [3].

How much you end up paying on the exchanges depends on where you live, your age, the number of people covered by the plan, and whether or not anyone covered uses tobacco.

So, how much will you pay for Obamacare? You can use a tool from the Kaiser Family Foundation [4] to estimate what you can expect to pay.

Subsidies for Those With Lower Incomes

Realize that you can receive subsidies to help you cover the cost of your mandatory health insurance if you make up to 400% of the poverty level. Also, recognize that if you qualify for Medicaid right now, your Medicaid remains the same. States that choose to adopt the PPACA [5] Medicaid expansion could provide health care for a wider variety of people.

If your state does adopt the expansion, allowing for those who make up to 138% of the federal poverty to enroll, you will have that benefit. Check with your state to find out whether Medicaid will be expanded, and whether you can enroll and save on your health care costs in 2014.

For those who don’t qualify for Medicaid, there are subsidies based on a sliding scale of need. The Kaiser Family Foundation tool bases your estimate on the “Silver” plan that exchanges provide. This is the middle plan, which comes with a modest deductible (out of pocket expenses) and middle of the road coverage.

A “Gold” plan provides better coverage, and costs more, while the “Bronze” plan provides less coverage and costs less. With a Gold plan you’ll have fewer out of pocket expenses, and with the Bronze you’ll have more.

I don’t qualify for a subsidy/tax credit, but I took the median income (according to the Census Bureau) in my area, which is $36,488, to run a possible scenario with the estimator. I assumed a family size of four (two adults and two children) with the adults aged 34 and no one using tobacco.

According to the Kaiser estimate, the unsubsidized┬ápremium for a Silver plan would be $11,161 per year. But you don’t have to pay that if you qualify for the subsidy. So don’t let that scare you. Instead, the estimate indicates that the yearly premium would be $1,542, or $128.50 per month once the subsidy is considered.

If you have fewer health care needs, you can opt for the Bronze plan — which would cost you nothing after your subsidy in this case. For comparison’s sake, consider that my three-person family is currently paying more than $400 a month in health insurance premiums, and we have a high-deductible plan (we use a HSA [6] as well). I might check into the exchange once it is up, just to compare possibilities, since I am self-employed.

However, even that $128.50 per month for the Silver plan can be difficult to pay if you are already strapped for cash and don’t have health insurance. On the other hand, if you don’t have health insurance, the Bronze plan — especially if your subsidy covers it — might be worth signing up for. You’ll have more coverage than you had before, and it won’t cost you extra.

(Photo: Clever Cupcakes [7])