How Much Will Obamacare Cost Me?

How much Obamacare costs you depends on five factors: your age, income, family size, location, and the type of plan you choose.

The Affordable Care Act, often called Obamacare, provides health care subsidies for middle-income individuals, families, and small businesses. It also expands free Medicaid for low-income households. It taxes higher-income families and businesses that don't provide health benefits.

Factors That Determine Costs

First, your cost depends on the plan category you choose. All health insurance plans fall into one of four categories. They all offer the same 10 essential health benefits. The four categories are:

1. Bronze: Has the lowest premiums, but only pays 60% of your health care costs. Pick this plan if you don't expect a lot of medical bills.
2. Silver: Pays 70% of your covered medical costs, but the premiums are higher than the Bronze plan. 
3. Gold: Pays 80% of your costs, with higher premiums than the Silver plan.
4. Platinum: Pays 90% of your cost, but has the highest monthly premiums. It will make sense to pick this plan if you have a chronic health condition.

The plans in each category allow you to compare monthly premiums, deductibles, copays, and annual out-of-pocket maximums.

You've got to estimate how much actual health care costs will be, then determine the insurance plan that helps you cut the total cost the most to find the best category for you.

Second, your costs depend on your age. Health insurance companies are allowed to charge higher premiums for older people, but they can't charge more than three times the premium for younger people. 

Third, is where you live. The cost of living, including health care, is higher in some cities compared to others.

Fourth and fifth are your income and family size. Depending on those factors, you can receive tax credit or financial assistance to help afford coverage. This is often measured by your household income in relation to the Federal Poverty Level.

Your Personal Costs for Obamacare

Depending on your job, family, and financial situation, health care under the Affordable Care Act will be more or less expensive. Below are some common scenarios and the costs associated with each.

I Make Less Than $18,754 (or $38,295 for a Family of Four)

If your income is 138% or less of the federal poverty level, you qualify for expanded Medicaid. That means Obamacare costs you nothing.

However, many states didn't expand Medicaid. If you fall within this income range, and you can't get Medicaid from your state, you won't have to pay the tax for not having insurance.

I Make Less Than $33,975 ($69,375 for a Family of Four)

If your income is under 250% of the poverty level, you pay no more than 4% of your income for the Silver Plan. In other words, your subsidy is the cost of the second lowest Silver Plan minus 4% of your income. Use Healthcare.gov's subsidy calculator to find out how much.

I Make More Than $54,360 ($111,000 for a Family of Four)

If your income is 400% or above the poverty level, you pay no more than 8.5% of your income for the Silver Plan. In other words, your subsidy is the cost of the second lowest Silver Plan minus 8.5% of your income.

I'm Not Planning To or Didn't Get Insurance

You will no longer be penalized by the Federal Government under the Affordable Care Act if you did not have insurance. However, some states have their own insurance penalties.

I Have Insurance

Your health insurance costs stay the same. But, you might get a better plan for lower costs from Obamacare. Keep in mind that health insurance costs are rising regardless of whether you have private health care or get it through the government. Businesses have been putting more of the cost onto employees for years to keep their profit margins.

Before the COVID-19 pandemic, health care costs were rising by 3% to 4% per year. Since the onset of the pandemic, the rise in health care costs jumped nearly 10%. In line with that, insurance companies are raising their fees.

Catastrophic insurance is considered qualified insurance. But you may want to compare it to a full-coverage plan on the exchange to see if you can lower your overall health care costs. The only people eligible are under 30 or have some other circumstances.

If you have COBRA, you can keep it. But you will probably get a better deal on the exchanges. 

I Make More than $200,000 ($250,000 for Married Couples)

Those making more than $200,000 per year ($250,000 for married couples filing jointly, $125,000 for married couples filing separately) pay these additional investment taxes:

• An additional 0.9% Medicare hospital tax on the income above the threshold.
• An extra 3.8% on the lesser of (a) investment income like dividends and capital gains or (b) adjusted gross income that is above the threshold. 
• This tax applies if you sell your home and you make more than $250,000 (singles) or $500,000 (married couples) in capital gains. If you're selling investment property, you don't receive this exclusion. It all counts as capital gains. 

I Deduct Medical Expenses

If you deduct your medical expenses that aren't covered by your health insurance, Obamacare will initially cost you more. You can deduct costs that exceeded 7.5% of your income.

I Use a Flexible Health Savings Account

You could contribute $2,750 to your FSA in 2021. Over-the-counter drugs are no longer eligible FSA medical expenses. If you don't use FSA funds for medical expenses, the tax penalty increase to 20%.

I'm a Small Business Owner

If you have 25 employees or fewer, you will receive a tax credit of up to 50% for your employees' premiums (35% for non-profit employers). 

Those with 50 employees or fewer can use the exchange to find lower-cost insurance. 

Those with 50 or more employees must provide affordable health insurance that provides minimum value or pay a tax of $2,000 per employee, for all but the first 30 employees. If a worker finds a lower-cost plan on the exchange, you may be taxed. That rule started in January 2015. ​

I'm a Member of Congress or Staff

These individuals receive insurance through the Affordable Insurance Exchange, created through the ACA, and the federal government contributes the lesser of 72% of the program-wide weighted average of premiums in effect each year or 75% of the total premium for the particular plan an enrollee selects. 

Obamacare Cost Calculator

You can also estimate Obamacare's cost with this Obamacare Cost Calculator from the Kaiser Family Foundation. 

Frequently Asked Questions (FAQs)