"Look out below! Work more, get less in Obamacare 'cliff'
.....In that scenario, an individual or family whose annual income surpasses maximums set by the federal government—if only by $1—will totally lose subsidies available to buy health insurance under the Affordable Care Act.....
......For a single person, that FPL income maximum is $45,960 per year. The maximums are adjusted upward for couples and families until maxing out at $94,200 for a family of four.
(Read more: Doctors skeptical, confused about Obamacare)
Under a scenario that ValuePenguin.com identified, a couple in Ohio, both age 50, would be eligible for subsidies worth $3,452 to purchase a so-called silver insurance plan—a moderately priced level of benefits under the ACA's scheme—that costs $9,346 annually if they made up to $62,040 per year.
But if they made just $1 more than that, they would lose the subsidy. Wu noted that the couple then would have to earn at least $65,492 to make up for the lost subsidy.
In New York, a family of three whose annual income totals $78,120, would pay $12,784 for the second-lower-priced silver plan on that state's insurance exchange. After getting a $5,363 tax credit, the family's net cost for the insurance would be $7,421.
But if the family earned even slightly more than $78,120, they would have to pay the entire $12,784 for the insurance because they then wouldn't qualify for the subsidy.
To make up for that, the family's annual income would have to reach $83,483, Wu said.
The age effect
The stark effect of peoples' age in determining their risk from the subsidy cliff is seen in two examples from Connecticut.
There, Wu said, a 27-year-old single man would pay $3,636 annually for the second-cheapest silver plan—less than the $4,366 cap on insurance premiums for individuals earning $45,960 or less annually. That person would not be eligible for subsidies, and thus would see no disincentive in working more hours.
But the annual premiums for a 50-year-old Connecticut couple buying that plan would be $12,468. If their combined incomes were $62,040 or less, they would receive $6,575 in subsidies to offset the cost.
However, if their income was more than that, they would lose the subsidies, leaving them out of pocket $6,575. They then would have to earn at least $68,615 to make up for that lost subsidy, Wu said."
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