Enhance Health

Fact Check: How the Real $6,400 Health Subsidy Works. Yes, It’s Legit – but You Won’t Get a Check.

Lately, social media has been buzzing with posts and videos spreading the word that the U.S. Government is granting a $6,400 subsidy to individuals under 65 who meet specific income criteria. The idea of receiving money from the government for your expenses may sound appealing, but these claims are simply a scheme aimed at tricking people.

Despite the chatter, there is no truth to the claim that the ACA subsidy provides eligible individuals & families with $6,400 in the form of cash or a check. While it’s worth noting that anyone promising direct cash assistance is being misleading, the fact is that the Affordable Care Act (ACA), also referred to as Obamacare, does indeed offer significant aid to make health insurance more accessible.

The confusion arises from how ACA subsidies function – they don’t come in the form of a one-time payment but instead will aid in lowering your monthly health insurance premiums. Though the total value of these subsidies can reach as high as $6,400, for certain individuals the subsidy amount is directly deducted from your insurance expenses rather than given to you in the form of a separate check or cash sum. 

Understanding the Real Obamacare Health Subsidy

So if you’re not receiving a $6,400 check what does the ACAs subsidy program offer you? The primary forms of support available include:

  • Premium Tax Credits: These subsidies decrease your health insurance premium costs. The credit amount is calculated based on factors like your household size, income level, and the price of the silver plan in your region.
  • Cost Sharing Reductions (CSRs): These subsidies help lower your out-of-pocket expenses. Such as deductibles, copayments, and coinsurance. To be eligible for CSRs, you need to enroll in a silver-level plan through the Marketplace.

The crucial point to grasp is that these subsidies are not distributed as one-time lump sum payments or checks. Instead, they are directly applied to your health insurance expenses each month effectively reducing your owed amount.

For instance, if the standard silver plan in your region costs $500 monthly and your income-based contribution is 4% of that amount (up to $20), the premium tax credit would cover the remaining $480. This implies you’d only need to pay the $20 each month, not the $500.

How to Avoid Subsidy Scams and Misinformation

The rise of these $6,400 subsidy schemes circulating on media platforms such as TikTok and Meta is a worrisome trend since they have the potential to mislead and defraud susceptible individuals. These scams often employ tactics pressuring individuals to “take action before the offer expires” and direct them to unrelated websites or phone numbers where they can claim their “free money.”

The U.S. Department of Health and Human Services (HHS) and reputable organizations have issued warnings about scams offering “money” cautioning the public to avoid offers or dubious claims.

To steer clear of falling into these traps, it’s essential to stay alert and depend on government sources for accurate information regarding genuine health insurance subsidies and support programs.

How does the government’s subsidized healthcare program really work?

While the promises of lump sum payouts & checks are not real, the Affordable Care Act (ACA) does offer aid to help millions of Americans afford health insurance. Here’s how the ACA subsidy program actually works.

Eligibility for the ACA Subsidies

To qualify for health insurance subsidies under the ACA your household income must fall between 100% and 400% of the poverty level (FPL). For 2024 this translates to an income range of $14,580 to $58,320 for an individual or $30,000 to $120,000 for a family of four.

Apart from meeting income criteria, you must also be a U.S. Citizen or lawful resident immigrant. You should not have access to employer-sponsored health coverage that meets requirements and should not be eligible for Medicaid, Medicare, or other public health programs.

It’s worth mentioning that the criteria for eligibility can differ slightly from one state to another as some states have opted to expand Medicaid under the ACA while others have not. Moreover, certain immigrants with an eligible status may qualify for subsidies even if their income falls below the poverty threshold.

Calculating Your Subsidy Amount

The subsidy amount in the form of a tax credit under the ACA is calculated on a sliding scale based on your household income. Individuals with incomes up to 150% of the Federal Poverty Level (FPL) are not required to contribute anything towards the silver plan premium as it is fully covered by the subsidy.

As your income increases so does your contribution requirement, reaching a maximum of 8.5% of your household income for those earning between 300% and 400% of the FPL. For instance, if the benchmark silver plan costs $500 per month in your area and you are required to contribute 4% of your income then your monthly premium would be $20, with the remaining $480 covered by the subsidy.

Keep in mind that the subsidies are not limited to the benchmark silver plan – they can be utilized to buy any ACA plan listed on the Marketplace.

How to Apply for the Real ACA Obamacare Subsidy Program

The process of applying for ACA health insurance subsidies is quite simple;

  1. Call Enhance Health and connect with a licensed agent.
  2. Provide your agent with the necessary information to complete your  application: You’ll need details regarding your household size, ages of all individuals within the household, and your estimated household income for the year.
  3. Submit Necessary Documents: Depending on your circumstances you may be required to submit documents to verify your identity, income, and other eligibility criteria.
  4. Confirm Your Eligibility & Choose a Health Plan: Your agent will help you select from health plans that align with your requirements and financial situation. The subsidies will automatically apply to your chosen plan.
  5. Enroll and Get Covered!

If you qualify for a premium tax credit you have the option to have it deducted from your premium reducing your overall payment. Although the Open Enrollment period for ACA health plans usually lasts from November 1st to December 15th each year, you may still be able to sign up outside of this timeframe if you go through a qualifying life event like losing existing health coverage, getting married or divorced, or having a child. (SEP article Link)

Calculate Your Subsidy

To determine your amount of ACA subsidies, consider using our online subsidy calculator. Just provide your household size, income, and age to discover the premium tax credits & cost-sharing reductions that you may qualify for. This tool can offer a customized estimate of your savings and assist in making well-informed decisions regarding your health coverage choices.

 

Conclusion

While promises of receiving a $6,400 payout in cash or a check is often aimed at deceiving individuals, the Affordable Care Act does offer significant support to help make health insurance more affordable for many qualifying Americans.

The subsidies provided by the ACA can effectively lower the out-of-pocket expenses associated with health insurance, ensuring that more individuals who previously faced affordability challenges can now access the coverage they need. While some may receive up to $6,400 annually in subsidies, these funds are directly applied to cover insurance costs rather than being given as a cash payment.

Always remember to stay vigilant and rely on government sources for information when navigating ACA subsidy opportunities. By grasping the advantages of the ACA subsidy initiative and using our subsidy calculator to estimate potential savings, individuals & families can make well-informed choices regarding their healthcare coverage while benefiting from the financial support provided by the government. Together we can strive towards a future where high-quality healthcare is accessible and affordable, for everyone.

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