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A Reader Asks: If Our Income Changes, Can We Change Plans?

Apr 25, 2014

Q. Do you have any idea how the exchanges will administer changes throughout the year? Our current income is about $38,000 per year, which qualifies us for an enhanced silver plan. My husband often gets seasonal construction work and that can increase his income to about $65,000. When he reports that change in income, will he be required to stay in the enhanced silver plan and pay the full cost, or can he switch to a lower cost plan that he can afford?

A. From your description of your plan and your income, it sounds as if you and your husband currently qualify for both cost-sharing subsidies that are available to people with incomes up to 250 percent of the federal poverty level (currently $38,775 for a couple) and premium tax credits that are available to those who earn up to four times the poverty level ($62,040 for a couple). The premium tax credits lower the sticker price and can be applied to any of the four plan types. The cost-sharing subsidies can reduce marketplace plan deductibles, copays and total out-of-pocket costs, but are only available to people who buy silver-level plans.

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If your husband’s income rises above 250 percent of the poverty level, however, you’d lose those cost-sharing subsidies and your out-of-pocket costs for copayments for doctors’ visits or for prescriptions, for instance, could be less affordable. Likewise, if your income reaches $65,000 you'd no longer qualify for premium tax credits. In that case, you might want to switch to a bronze plan with a lower premium, says Cheryl Fish-Parcham, private insurance program director at Families USA, a consumer advocacy group.

And you can do that. Under the health law, if your eligibility for cost-sharing subsidies changes, you have 60 days to switch from one marketplace plan to another. A similar though broader rule applies to eligibility for premium tax credits, enabling people to switch plans or enroll for the first time if they aren’t already on the exchange.

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