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Covered California and Obamacare related questions from consumers, employers and agents are answered by Phil Daigle with the best information available at the time. Archived entries may no longer be accurate as the Covered California and Obamacare knowledge-base is evolving quickly. TO REQUEST A PERSONAL RESPONSE INCLUDE EMAIL ADDRESS.

Subsidy Fixed Number or Percentage?

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Question: It appears from the rates out today that the subsidy level is fixed not the premium as an earlier question indicated. I thought the premium was a % of income, can you clarify?

Answer: The net premium for those eligible for a premium subsidy is a percentage of income. You may have been confused by a table such as the one below, that was released with the announcement of the new rates. This is an example of the rates a 40 year old single individual might pay (net after subsidy) in Region 16 (Los Angeles - South) for a Silver Plan.


That amount shown in each box at the top and in black is the net premium due after subsidy. The premium subsidies are shown in green. While this is a fixed number, it is derived as a percentage of the total premium and that percentage varies with income.

The net cost of a silver level plan after subsidies can be computed using a percentage of income on a sliding scale as follows:

  • Up to 133% FPL - 2% of income
  • 133 - 150% FPL - 3% - 4% of income
  • 150 - 200% FPL - 4% - 6.3% of income
  • 200 - 250% FPL - 6.3% - 8.05% of income
  • 250 - 300% FPL - 8.05% - 9.5% of income
  • 350 - 400% FPL - 9.5% of income


If I choose one of the more expensive silver plans will my insurance premium pay stay below the percentage associated with my income as % of FPL. For example if I am at 200% FPL and I choose the most expensive silver plan, then I imagine my monthly insurance premiums will exceed 6.3% of my income?

From the post “The premium subsidies are shown in green. While this is a fixed number”

The subsidy is fixed for a given region, but is different in other areas of the state. A 202 dollar subsidy in the Los Angeles area may be over 300 dollars in the SF Bay Area, however the cost of the Silver Plan will also be higher in that area.

I still don’t understand why the plan costs are so much higher in the Bay Area. $365 in Alameda Co. vs $325 in LA South.

However, after the subsidy, a person whose income is 150% FPL, the Alameda Co. person only pays $65,($365 - $300 = $65) while the LA South person pays $123. ($325 - $202 = $123)

Seems strange. Or do I have it wrong?

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