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I consider myself reasonably well informed on the ACA. I've read a lot, discussed it frequently, helped friends and family members be researching costs, and explained it to several dozen elderly conservatives at dinners on a cruise I recently went on.

That's why I was surprised this morning to find out that the tax credit isn't the only subsidy available - there's a 'Cost-Sharing Reduction' version of the Silver level plans available to those with incomes less than 250% of poverty level. That's $58,875 for a family of 4, so this subsidy is potentially available to a large percentage of Americans in the individual market.

A family of 4 earning $40,000 (169% of the poverty level) gets 87% of their out-of-pocket expenses paid instead of the normal 70% in a Silver plan.

Here's a link to a better explanation of the subsidy: Cost-Reduction Sharing

This is a potentially large reduction in health care costs provided by Obamacare, and yet I haven't seen or heard it mentioned anywhere in the media. Why?

I came upon this subsidy as I was researching a story on this morning. It was the usual 'premium shock' complaint:

"All we ever heard about Obamacare is that it would lower our deductibles and premiums," said Jennifer Slafter, 40 of Mabel, Minn. "That's just not what's happened."

Slafter and her husband, Steve, are scrambling to find affordable care for themselves and their two children. The exchange's Blue Cross Blue Shield plan was $1,087 a month with a $6,000 deductible, while a Medica plan was $877 a month with a $12,700 deductible.

Both are steeper than their current plan.

I went to the Minnesota ACA website and found the numbers are correct as shown. What we don't know is the income of this family, and that is important. Here's what I found about their potential subsidy at different income levels:

$94,000            $3,505 annual subsidy for BCBS monthly premium of $794
$70,000            $5,841                               "                                   $600
$50,000            $9,609                               "                                   $286
$40,000            $10,469                             "                                   $215

For income above $94,000 there is no subsidy.... but I don't have a lot of sympathy for people in that income bracket.

And if this family is concerned with the $6,000 deductible, they could choose a Gold Plan with a $300 deductible. For this family, assuming income of $50,000, the premium cost would be $509 per month.

And, in addition, if their income is below $58,875, they qualify for further subsidy as I mentioned above.

As so often happens in these 'premium shock' cases, a little research shows that the truth is far, far better than the headline.


2:29 PM PT: 5:56pm - Wow! Rec list and Community Spotlight (never been there before). Thanks to everybody who participated. I especially like the thoughtful comments, and really enjoy when people start discussing things.... that's the best way to learn and spread knowledge. Cheers!

Originally posted to databob on Fri Nov 22, 2013 at 07:00 AM PST.

Also republished by Community Spotlight.

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