Does the calculator provide definitive estimates of what people would pay under the health reform law? No. The calculator is intended to illustrate how families in varying circumstances would be affected by the tax credits and limits on age rating included in the law. In addition to what people would pay in premiums, they would also have out-of-pocket expenses for cost sharing (e.g., deductibles and coinsurance), which in some cases would be subsidized based on income. In addition, there are many other elements of these proposals that could increase or decrease how much people pay, including efforts to make the health care system more efficient and additional revenue measures to finance the federal cost of reform. The calculator provides illustrative estimates in 2014 when the premium subsidies begin, though these estimates depend on assumptions about what premiums will be at that point.  

How do premium subsidies work? People purchasing coverage on their own would be eligible for government subsidies (through a tax credit) towards their health insurance premiums based on income. Subsidies would be provided to people with family income between 133% and 400% of the federal poverty level. The most that families buying coverage in an insurance Exchange would pay towards a health insurance premium would range from 3.0% of income at 133% of poverty to 9.5% of income at 400% of poverty, with amounts at specific income levels specified in a table in the law. Subsidies are tied to a benchmark level of coverage based on actuarial value. And, subsidies would only be available through organized purchasing pools called Exchanges.  

What is the poverty level? The federal poverty level varies by family size. In 2009, it is $10,830 for a single adult and $22,050 for a family of 4. The poverty level is estimated for 2014 based on Congressional Budget Office projections of inflation.  

How does Medicaid relate to income-related subsidies? Currently, Medicaid eligibility based on income varies substantially by state, and is generally limited to certain categories of people (e.g., children, parents, people who are disabled, and people age 65 or older). More information on current state policies is available  here . The health reform law calls for an expansion in Medicaid eligibility to all people with income below 133% of the poverty level. In general, people receiving Medicaid coverage would not pay premiums and would have modest cost sharing. The calculator notes when people would be eligible for Medicaid under the reform law, but others with higher incomes may also be Medicaid-eligible depending on what state they live in and, in some cases, what assets they have.  

How do premiums vary by age and health status? Under the status quo, people buying coverage on their own generally face medical underwriting, meaning that they can be turned down for coverage or charged a higher premium based on their health status. That is prohibited under the reform law. Premiums today also vary by the age of the policy holder, with the premium for a single 64 year old typically being five times or more the premium for a 19 year old. For families the variation in premiums by age is generally less pronounced. The law

caps the amount that an insurer can vary premiums by age at three to one, meaning that premiums for older people would be lower than under the status quo while premiums for younger people would be higher.

How do premiums vary by location? As under the status quo, the law would permit premiums to vary by geographic area, reflecting the fact that the cost of living and health care expenses vary significantly by location. As shown  here , average health insurance premiums vary quite a bit by state, with the lowest family premium in a state at about 17% below the national average and the highest at about 11% above the average. Premiums also vary by location within states, so the range across communities nationwide is larger than the statewide averages suggest. The calculator allows users to see the effects on people living in higher or lower cost areas by adjusting the premium up or down by 20%.  

What is actuarial value and how does it affect premiums? The actuarial value of a health insurance policy is the percentage of the total covered expenses that the plan would, on average, cover. For example, a plan with a 70% actuarial value means that consumers would on average pay 30% of the cost of health care expenses through features like deductibles and coinsurance. The amount that consumers pay would vary substantially by the amount of services they use. The health reform law specifies a benchmark level of coverage for the purposes of premium subsidies using actuarial values. Subsidies would be tied to plans with an actuarial value of 70%, with additional assistance provided for cost sharing based on income. Insurers would have to cover a defined set of health care services and cap the total amount of cost sharing required of consumers at defined levels, but could otherwise vary the structure and degree of cost sharing so long as minimum actuarial value thresholds are met. The illustrative premiums used in the calculator are estimated based on 2014 costs for a single 40 year old, assuming a premium of $4,500 for a 70% actuarial value plan.  

Can premiums be compared to what people are paying today? Premiums cannot necessarily be compared to what people are paying now. Most people with insurance today have coverage through work, where the employer is paying for a portion of the premium. The premiums and tax credits presented in the calculator apply to people who are buying insurance on their own. The premium calculations are consistent with estimates of premiums under reform prepared by the Congressional Budget Office. CBO projects that average premiums under reform for the same level of coverage for a given group of enrollees would be 7-10% lower than under the status quo. However, in many cases coverage will be more comprehensive and accessible than what is typically available today in the non-group market. As a result, 2014 premiums in the calculator cannot necessarily be compared to what people buying insurance on their own are paying in 2010.