The new law has several provisions that are aimed at making private health insurance more affordable that will take effect in 2014. First, premium tax credits and cost-sharing subsidies will be available for U.S. citizens and legal immigrants purchasing coverage on their own in the new health insurance exchanges. The premium tax credits will be available to those with incomes up to 400% of the poverty level ($43,320 for an individual or $88,200 for a family of four in 2009) and will limit what a person has to pay toward the premium to a specified percentage of income. The amount people will have to pay will range from 2% of income for those with income up to 133% of the poverty level to 9.5% of income for those with income between 300 and 400% of the poverty level.  In addition to premium tax credits, people with incomes up to 250% of the poverty level ($27,075 for an individual or $55,125 for a family of four in 2009) will be eligible for cost-sharing subsidies that will reduce what they will have to pay out-of-pocket for covered health services. 

Second, the law establishes limits on what people buying insurance in the exchanges and some others will pay out-of-pocket for services covered by health plans. These limits are set initially at $5,950 for an individual and $11,900 for a family, and grow over time.  For people purchasing coverage in the exchanges who have incomes at or below 400% of the poverty level, the out-of-pocket limits will be reduced to one-third of the overall limits for those with incomes 100-200% FPL; by one-half for those with incomes 200-300% FPL; and by two-thirds for those with income 300-400% FPL.

Finally, deductibles for new plans offered by small employers will be limited to $2,000 for individuals and $4,000 for families (existing grandfathered plans will be exempt from this new requirement).

Affordability and Subsidies , Insurance