Continuing the discussion from Moving to the US and want to understand the healthcare system to take care of T1D:
I’m answering this in a new topic because there is too much information. I’d hoped to be able to post this stuff after the Enhanced Premium Tax Credit continuation has been decided but it looks like that won’t happen until after we get the opportunity to sign up for plans.
The increases come in two parts, the underlying ACA plan premium itself (which is zip-code, age and smoking related) and the Premium Tax Credit (PTC) which is money from the Federal government given to help people pay the premiums.
Originally the PTC was limited to those below a certain income. During COVID this was suspended and everyone could get it though it still decreases with income until it hits $0. Next year as the law stands this “enhanced” premium tax credit will go away and that can have a catastrophic for people with moderate incomes. About 10% of ACA plan holders are expected to lose the credit and may of those with the incomes closest to the limit will see a massive premium increase or, maybe, drop health insurance.
The credit limit for n people is $40,600+n*$22,000, so $62,600 for one person, $86,400 for two people filing jointly (married with no children, single parent with one) etc.
The credit itself depends on the “second lowest cost silver plan” and that varies by zip-code and age. The credit is easy to see from our 2024 tax returns. Look for Form 8962 “Premium Tax Credit (PTC)” and check line 26. The number is also on Schedule 3 (the third “postcard”) line 9 and it carries through to Form 1040 line 31 (though check Schedule 3 - other things may be added in).
Once you have that number check line 11 on Form 1040, “Adjusted Gross Income”; if that number is close to the above calculation of the limit you may go over the limit next year. The exact number is on Form 8962 Line 2a; working out that number requires reading the instructions. Look for the instructions for Line 2a but check the tax year; at present the instructions are for 2024 and that is likely to remain the case until next year. It is quite possible that the 2026 instructions will be changed; getting this right is very difficult because a lot of the time the rules are only published after we have made all our decisions!
This is the predictable part of the answer to your question and for many moderate income Americans (about 10% of the people who have ACA plans) it is a really big deal, particularly if they are older. I estimate that it’s a 50-50 chance of the enhanced credits being retained because this definitely has bipartisan appeal.
However for many self employed people if the enhanced credits are removed there is a strong justification for taking a 1-month or even 2-month holiday to reduce annual income below the threshold. We really can be better off by earning less!
Some states (including MN) have their own low-income credits but they are not as tax effective as the Federal one.
The other part of the increase is the ACA plan premium itself. There is a lot of speculation on that. We won’t know for sure until November 1 and maybe not even then if the website fails and can’t be fixed because of the shutdown. (The good thing so far is that Medicare.gov is still up and running.)
Unfortunately the premium is entirely dependent on zip-code and age. It may well be different for everyone on TUD. States have their own state-specific information and sometimes apps to work out the best plan and, thereby, find the premium for next year. healthcare.gov will be the place to start on November 1.
Oregon and probably other states also has a “Marketplace Window Shopping tool” which is already up and running but that may only work when accessed through the link existing ACA subscribers received.
For my wife (in Oregon, aged 61) her current plan (a catastrophic plan, “Bronze” HDHP) will go up from $1109/month to $1273/month. That is an estimate; in practice premiums change even after Nov. 1 (but not normally by much.) That’s small by the current pundit predictions, 13%, but there is politics galore in those various predictions. This is why it is important for everyone who can choose their own healthcare (i.e. not an employer plan, or on a really scummy employer plan) to look now or ASAP.
The PTC my wife will get if it is not cancelled is, I think, massively reduced because I am no longer using ACA plans; there is only one plan premium but we still file jointly so our costs halve but our income does not. Check very carefully whether the plan is on marketplace or off marketplace My understanding is that PTCs are only available for “on” plans.
The base PTC without income adjustment from the plans I can see is $15960 (the second lost cost silver plan which has a premium of $1330/month). Anyone can find approximately that number by scannning down the list and finding the silver plan with the second lowest cost; that’s the basis for the PTC, though I think it is necessary to turn off “smoking”.
A 60-65 year old person with an income of $62600 ends up with a PTC of $10639 (this is very approximate) regardless of plan. That’s $887/month. If that person got a single $1 more in income he or she would pay an extra $10639 in tax (or lose the corresponding amount in refund).
It is also important to remember that if you get the cheapest plan and have to use it you will have to pay money up front until you meet the “out of pocket max”. There is no deductible on those plans, that’s why they are “catastrophic”. For people who anticipate $0 health requirements in 2026 that will be cheapest (see the table below) and almost certainly best, but you have to be able to cover all your actual costs; the catastrophic plan gives no help until there is a catastrophe.
It’s not that simple for anyone else because at some point the “Gold” plans get cheaper. That point depends on the “deductible” because, at that point, “Gold” plans start paying 80% of the cost whereas with the lowest cost plan the deductible is actually stated to be $7500, same as the OOPMax and, because we pay 100% of cost up to the deductible but then 0% beyond the OOPMax, the answer of which is best depends on the precise math.
I did a quick experiment with the results for people aged 21, 31, 41, 51 and 61 to produce this table (for non-smokers) choosing the absolute lowest cost (Bronze, HDHP, Catastrophic) plan vs the Gold plan with the lowest deductible ($250) and an OOPMax of $8500:
| age band | HDHP premium | HDHP max | SLCSP | PTC | GOLD premium | GOLD max | Low Breakpoint | High Breakpoint |
|---|---|---|---|---|---|---|---|---|
| 20-25 | $394 | $12,228 | $473 | $5,676 | $605 | $15,760.0 | $3,415 | $35,445.00 |
| 30-35 | $457 | $12,984 | $549 | $6,588 | $701 | $16,912.0 | $3,910 | $35,280.00 |
| 40-45 | $513 | $13,656 | $616 | $7,392 | $788 | $17,956.0 | $4,375 | $35,125.00 |
| 50-55 | $735 | $16,320 | $883 | $10,596 | $1,128 | $22,036.0 | $6,145 | $34,535.00 |
| 60-65 | $1,107 | $20,784 | $1,330 | $15,960 | $1,700 | $28,900.0 | $9,145 | $33,535.00 |
The “max” columns are the maximum someone who uses the relevant plan (and is in the age band and doesn’t smoke) will pay in a year for medical costs regardless of how much they are. The numbers are simply 12xpremium+OOPMax
You can see that for the risk averse the “catastrophic” plans are always better. The same applies to people who do not need to call upon the plan. The “low breakpoint” is the point where healthcare costs including the amount paid by insurance are such that the amount paid after insurance including the premium matches for the two plans. The “high” breakpoint is the same but at the other end; where the HDHP plan starts to have lower costs again. The Gold OOPMax is $8500 and that corresponds to pre-insurance costs of $41,500; above the “high” breakpoint in all cases. The corresponding figure for the HDHP plan is simply the OOPMax itself, $7500.
The Gold plan “wins” with annual costs for health-care between the “low” and “high” breakpoints. These are costs before the insurance coverage; what the healthcare provider gets, not what we pay. The SLCSP determines the premium tax credit but it is the same for both plans.
For people my age the catastrophic plan is always best because the “low” breakpoint is more than the HDHP OOPMax ($7500) and can therefore never be reached on the catastrophic plan.
Unless you old, really are risk averse or just plain risky (ski mountaineering?) the gold plan is worth considering, as are the silver plans. To do so you need to enter your prescriptions and physicians into healthcare.gov (etc). Both are important; all the ACA plans available where I live are “EPO” plans, using a physician or hospital outside the network costs a lot more.
healthcare.gov can do this across most prescriptions but not omnipods or, I think, pump related supplies in general. At present I can’t enter either Omnipods or G7s. I don’t know a good solution to this. The only thing I can think to do is to use 2024 costs and back-calculate the pre-insurance cost using the copay on the plan (Bronze/Silver/Gold 40%/30%/20%) and the deductible but that’s very approximate as a result of the “tier” stuff found on Gold and maybe some Silver plans.