ACA Health Insurance: Understanding the Spousal Income Impact on Subsidies

What is the ACA?

The Affordable Care Act, commonly known as the ACA or Obamacare, is a comprehensive healthcare reform law enacted in 2010. One of its primary goals is to expand health insurance coverage to more Americans, especially those with pre-existing conditions.

ACA Subsidies

To make health insurance more affordable for low- and middle-income individuals, the ACA introduced premium subsidies. These subsidies help reduce the monthly cost of health insurance plans purchased through the Health Insurance Marketplace.

Impact of Marriage on ACA Subsidies

Marriage can significantly impact ACA subsidy eligibility. When individuals marry, the combined income of both spouses is considered when determining subsidy eligibility. This means that if one spouse has relatively high income, it can reduce or eliminate the other spouse’s subsidy.

Case Study:

Let’s consider the case of an individual earning $13,000 per year who has been receiving 100% coverage under an ACA bronze plan. After getting married, their spouse’s income of $83,000 is added to their own. As a result, their combined income now exceeds the subsidy threshold, making them ineligible for premium assistance.

Options for Individuals Affected

If you find yourself in a similar situation, there are several options to consider:

Explore the Marketplace’s Cheaper Plans: While the most useless plan may cost $350 per month, there may be other plans available at lower premiums. It’s worth browsing the Marketplace to see if there are more affordable alternatives.
Consider Adding to Spouse’s Insurance: Adding you to your spouse’s insurance may be an option, but it’s important to carefully weigh the cost and coverage provided. If your spouse’s plan offers adequate coverage and is within your budget, this could be a viable solution.
Seek Professional Assistance: Licensed health insurance agents can help you navigate the complexities of the ACA and explore your options. They can provide personalized advice based on your specific circumstances.

Conclusion

The impact of marriage on ACA subsidies can be significant. It’s important to understand how income is considered when determining subsidy eligibility. By exploring different options and seeking professional assistance when needed, individuals can find affordable health insurance coverage that meets their needs.