Personal finance

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Anyone without health insurance has about two weeks left to get 2023 coverage through the public marketplace — and subsidies could make it affordable.

Open enrollment for the federal health care exchange runs through Jan. 15, with coverage taking effect Feb. 1. (If your state has its own exchange, the last day to enroll may be different.) After the sign-up window closes, you’d generally need to experience a qualifying life event — i.e., birth of a child or marriage — to be given a special enrollment period.

Most marketplace enrollees — 13 million of 14.5 million in 2022 — qualify for federal subsidies (technically tax credits) to help pay premiums. Four out of 5 customers will be able to find 2023 plans for $10 or less per month after accounting for those tax credits, according to the Centers for Medicare & Medicaid Services.

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Some people may also be eligible for help with cost sharing, such as deductibles and copays on certain plans, depending on their income.

For the most part, people who get insurance through the federal (or their state’s) exchange are self-employed or don’t have access to workplace insurance, or they don’t qualify for Medicare or Medicaid.

As of Dec. 15, nearly 11.5 million people had selected a plan through the marketplace, according to CMS.

The tax credits are more generous now

The subsidies are still more generous than before the pandemic. Temporarily expanded subsidies that were put in place for 2021 and 2022 were extended through 2025 in the Inflation Reduction Act, which became law in August.

This means there is no income cap to qualify for subsidies, and the amount anyone pays for premiums is limited to 8.5% of their income as calculated by the exchange. Before the changes, the aid was generally only available to households with income from 100% to 400% of the federal poverty level.

The marketplace subsidies that you’re eligible for are based on factors that include income, age and the second-lowest-cost “silver” plan in your geographic area (which may or may not be the plan you enroll in).

For the income part of the determination, you’ll need to estimate it for 2023 during the sign-up process.

Giving a good estimate matters

Be aware that it’s important to give a good estimate.

If you end up having annual income that’s higher than what you reported when you enrolled, it could mean you’re not entitled to as much aid as you’re receiving. And any overage would need to be accounted for at tax time in 2024 — which would reduce your refund or increase the amount of tax you owe.

“You don’t want a nasty surprise when you do your taxes the next year,” said Cynthia Cox, director for the Kaiser Family Foundation’s Affordable Care Act program.

Likewise, if you are entitled to more than you received, the difference would either increase your refund or lower the amount of tax you owe.

Either way at any point during the year you can adjust your income estimate or note any pertinent life changes (for example, a birth of a child, marriage, etc.) that could affect the amount of subsidies you’re entitled to.

Falling behind on premiums can mean getting dropped

Be aware that if you don’t pay your premiums (or your share of them), you face coverage being canceled and claims going unpaid.

For enrollees who get subsidies, coverage is generally dropped after three months if premiums are not caught up. For those who pay the full premiums because they don’t qualify for subsidies, there’s only a grace period of about a month before cancellation, depending on the state. 

If you end up without insurance, you can’t re-enroll through the marketplace unless you qualify for a special enrollment period.

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