One of the most confusing aspects of healthcare reform is the creation and funding of subsidies.
Low and middle income individuals will be given money to buy a health insurance plan in a highly regulated exchange market.
These markets will be either statewide or regional--the latter encompassing states with smaller populations.
However, some people are unsure of their eligibility for subsidization.
What money of theirs counts? According to the legislation, eligibility for subsidized health coverage will depend on a combination of sources.
The sum is known as modified gross income.
Modified gross income includes the following sources of cash:
That makes the affordable health insurance subsidy different from other government programs intended to help the poor.
For example, Medicaid requires an assets test: if you have too much in assets, you are not eligible for services.
This is an understandable method of saving money on people who are not truly in need, as well as preventing fraud in the system.
However, it can have some negative impact.
Those who have received cash settlements due to an accident or disability will still be able to take advantage of a subsidized individual or family health insurance plan, although there are some limitations.
Any interest they earn on an investment of the sum will count towards their income.
Since the subsidy takes effect in 2014, people in that situation may choose to adjust their investments accordingly.
Low and middle income individuals will be given money to buy a health insurance plan in a highly regulated exchange market.
These markets will be either statewide or regional--the latter encompassing states with smaller populations.
However, some people are unsure of their eligibility for subsidization.
What money of theirs counts? According to the legislation, eligibility for subsidized health coverage will depend on a combination of sources.
The sum is known as modified gross income.
Modified gross income includes the following sources of cash:
- wages from employment
- interest income/capital gains on investments
- alimony
- child support
That makes the affordable health insurance subsidy different from other government programs intended to help the poor.
For example, Medicaid requires an assets test: if you have too much in assets, you are not eligible for services.
This is an understandable method of saving money on people who are not truly in need, as well as preventing fraud in the system.
However, it can have some negative impact.
Those who have received cash settlements due to an accident or disability will still be able to take advantage of a subsidized individual or family health insurance plan, although there are some limitations.
Any interest they earn on an investment of the sum will count towards their income.
Since the subsidy takes effect in 2014, people in that situation may choose to adjust their investments accordingly.
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