Obamacare Fallout: $1 pay hike could cost a Middle-Class Family a $9,355 Hike in Premiums

Patient Protection and Affordable Care Act (AKA Obamacare) is fully enforced on individuals and families next year, a middle-aged, middle-class couple with three children could be hit with a $9,355 hike in their annual health-insurance premiums if their annual household income happens to increase by just $1. 

Under ACA, all Americans are required to secure health insurance. Those who do not get it through their employer can buy it through government-run health-insurance exchanges, which the law requires to be set up in every state. People buying their Obamacare-mandated health coverage through these exchanges will be eligible for federal subsidies in the form of a refundable tax credit---as long as their adjusted gross household income is between 100 percent and 400 percent of the Federal Poverty Level (FPL).

People whose household income is too small to qualify for the subsidy will be put on Medicaid. People whose household income exceeds 400 percent of the FPL will get no subsidy at all. 

According to the IRS, which responded to a CNSNews.com inquiry on the issue, a household earning an annual income that is just $1 more than 400 percent of the FPL is ineligible for an Obamacare subsidy, period 

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This hypothetical family started out with an annual income of $110,280—exactly 400 percent of the Federal Poverty Level. According to the Kaiser Family Foundation subsidy calculator, their total annual premiums for an Obamacare-approved “Silver” health-insurance plan were $19,832. Under the Obamacare subsidy regulation, this family would be required to pay $10,477 of that premium—which equals 9.5 percent of their household income, the Obamacare cap on premiums for people earning between 300 percent and 400 percent of the Federal Poverty Level.

The rest of this family’s annual premium--$9,355—would be covered by the federal government in the form of subsidy payments that the Treasury would send directly to the family’s insurance company.   

But, continuing our hypothetical example, this mom and dad each get a 50-cent raise in their annual salaries. As a result of those 50-cent raises, their household income climbs an entire dollar to $110,281—putting their household income exactly $1 over 400 percent of the Federal Poverty Level.

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