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Center for Labor Research and Education

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Methodology and Assumptions for National Calculator

This interactive calculator determines Medicaid eligibility and estimates maximum contributions towards premiums for individuals and families who purchase coverage in the Marketplace, based on household size, income level and age of the household members who need coverage. The calculator reflects the Medicaid eligibility expansion, premium subsidies, and age rating methodology included in the health reform law signed in March 2010 and subsequent federal regulations.

Medicaid eligibility will be determined excluding the following types of income: scholarships, awards, or fellowship grants used for education purposes and not for living expenses, and certain American Indian and Alaska Native income derived from distributions, payments, ownership interests, real property usage rights, and student financial assistance., and age of the household members who need coverage. The calculator reflects the Medicaid eligibility expansion, premium subsidies, and age rating methodology included in the health reform law signed in March 2010 and subsequent federal regulations.

The calculator indicates whether an individual may be eligible for Medicaid under the law beginning in 2014. Medicaid eligibility will be expanded to 133 percent of the Federal Poverty Level (FPL) with a 5 percentage point income disregard under the law for U.S. citizens and individuals who have lawfully resided in the U.S. for at least five years. The calculator is designed to be used in states that choose to participate in this Medicaid eligibility expansion. The calculator does not account for state-specific Medicaid or Children’s Health Insurance Program eligibility standards.

Individuals and families who are U.S. citizens or lawful residents will be eligible to purchase coverage in the Marketplace beginning in 2014 if they are not eligible for a federal program such as Medicare, Medicaid, or the Children’s Health Insurance Program, and do not have an offer of affordable coverage through their employer or a family member’s employer. Employer-sponsored plans will be considered unaffordable if the employee contribution for employee-only coverage is more than 9.5 percent of household income or if the plan has an actuarial value of less than 60 percent.

Estimated premiums without subsidies reflect the weighted average of the second lowest cost silver plans in 48 states from the U.S. Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation (September 2013). The weighted average premium was applied to a 46-year old, based on analysis of the age at which the weighted average premium falls in the UC Berkeley – UCLA California Simulation of Insurance Markets model. Age-adjusted premiums for each household member are aggregated into a family premium, using the methodology outlined in final federal regulations released in February 2013. In some states, premiums will also vary based on tobacco use, but that is not taken into account in this calculator.

For individuals with household income below 400 percent FPL who purchase coverage in the Marketplace, the law limits individuals’ premium contributions to a set percentage of household income. The calculator returns the maximum contribution towards the premium and the estimated unsubsidized age-adjusted silver plan premium. If the monthly premium is less than the maximum premium contribution, the household will pay the premium without subsidy. The premium caps range from 3.0 percent of income at 133 percent FPL to 9.5 percent of income at 300 through 400 percent FPL. The premium percentage cap will be 2.0 percent for households with income below 133 percent FPL, applicable to legal immigrants who are not eligible for Medicaid. This cap is not shown in the calculator as most individuals with income below 133 percent FPL will be eligible for Medicaid. The calculator uses 2013 FPLs, which will be used by the Marketplace during the open enrollment period for the 2014 plan year.