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Your Obamacare Coverage Could Be Cheaper Than You Think

November 1, 2016, 2:42 PM UTC
Deadline Approaches To Signup For Health Insurance Under Affordable Care Act
Photograph by Joe Raedle — Getty Images

Tuesday is the first day of open enrollment for the Affordable Care Act in 2017, and while it looks like Americans will be paying more for Obamacare, the U.S. government wants to reassure them it could actually be cheaper.

According to the Department of Health and Human Services, the average monthly premium for the benchmark plan will rise 25%, from $242 to $306 next year for states on the federal exchange.

But many enrolless will also get a discount on their premiums or out-of-pocket costs based on their income, Health and Human Services Secretary Sylvia Burwell said Tuesday.


“Eighty-five percent of those folks actually receive tax credits or subsidies,” she said in an interview with NPR. “And for them, that insulates them from these changes,”

For example, the average subsidy for eligible consumers at the end of March 2016 was $291 per month, according to the Centers for Medicare and Medicaid Services. That subsidy covers 75% of the 2016 average monthly premium across all plans of $386.

This year, individuals qualify for discounts on their premium if they earn between $15,302 and $46,021. A family of four that makes between $31,155 and $91,700 can also qualify for discounts.

Consumers who make between $11,505 and $46,021 annually qualify for subsidized private insurance on the state-based online marketplaces, while those who make less than $15,302 qualify for Medicaid.

But other consumers will have to bear the brunt of their premium’s full and rising price, and any relatively healthy, and middle-income Americans may choose to abandon the marketplace. Should that happen on a large scale, the cost of Obamacare premiums will continue to rise next year.