SOLUTION: Compare insurance plans for a single male who makes who makes 20000 a year and a 60 year old single woman who makes 35000 a year. How do the cost and tax credits compare? W

Question 1165398: Compare insurance plans for a single male who makes who makes 20000 a year and a 60 year old single woman who makes 35000 a year.
How do the cost and tax credits compare?

What percentage of income will premium cost for each individual?
Make a statement about affordability of healthcare for the two individuas.
I can pay. Please help. Need asap

Answer by CPhill(2138) (Show Source): You can put this solution on YOUR website!
This is a great, practical question about healthcare affordability under the Affordable Care Act (ACA) marketplace. While I cannot provide real-time quotes or specific plan details without knowing their location, I can provide a detailed comparison of how the **cost, subsidies, and affordability** are determined for these two individuals based on their age and income relative to the Federal Poverty Level (FPL).
---
## 🏥 Comparison of Healthcare Costs and Subsidies
We will assume the individuals live in the contiguous United States and are not eligible for Medicare (for the 60-year-old) or employer-sponsored insurance.
| Individual | Age | Annual Income | FPL for a Single Person (Approx. 2025) | Income as % of FPL |
| :---: | :---: | :---: | :---: | :---: |
| **Male 1** | 30 | \$20,000 | $\approx \$15,060$ | **$133\%$ of FPL** |
| **Woman 2** | 60 | \$35,000 | $\approx \$15,060$ | **$232\%$ of FPL** |
### 1. Cost & Subsidy Comparison
The primary subsidy under the ACA is the **Premium Tax Credit (PTC)**, which limits the percentage of income a person must pay for a benchmark Silver plan.
| Feature | Male (133% FPL) | Woman (232% FPL) | Comparison Summary |
| :--- | :--- | :--- | :--- |
| **Premium Tax Credit (PTC)** | **Large.** Premium is capped at **$\approx 3.0\%$** of income. | **Moderate.** Premium is capped at **$\approx 7.0\%$** of income. | Both qualify for significant subsidies, but the lower-income individual (Male 1) gets a much larger subsidy, capping their required contribution at a lower percentage. |
| **Benchmark Premium Cap** | $\$20,000 \times 3.0\% = \$600/\text{year}$ $(\$50/\text{month})$ | $\$35,000 \times 7.0\% = \$2,450/\text{year}$ $(\$204.17/\text{month})$ | This is the *maximum* they would pay for the benchmark Silver plan. |
| **Age Factor in Premiums** | Premiums are naturally **lower** due to lower health risk associated with being younger. | Premiums are naturally **higher** due to higher health risk associated with being older (up to 3x higher than a 21-year-old). | The woman's unsubsidized premium will be significantly higher than the man's. |
| **Cost-Sharing Reduction (CSR)** | **Yes.** Individuals under $250\%$ FPL may qualify for CSRs, which reduce deductibles, copays, and out-of-pocket maximums **on Silver plans only**. | **Potentially.** The 60-year-old is also under $250\%$ FPL, making her eligible for CSR. | Both individuals can access significantly better coverage (lower out-of-pocket costs) than the standard Silver plan for the same price. |
---
## 2. Percentage of Income for Premium
The "benchmark" for affordability is the **second-lowest cost Silver plan** in their area. The premium cost for this plan is capped based on their FPL bracket.
### Male (Age 30, Income \$20,000)
* **Income % of FPL:** $133\%$
* **Affordability Cap:** $\approx 3.0\%$ of income
* **Maximum Annual Premium Cost:** $\$20,000 \times 0.030 = \mathbf{\$600}$
$$\text{Premium as \% of Income} \approx \mathbf{3.0\%}$$
### Woman (Age 60, Income \$35,000)
* **Income % of FPL:** $232\%$
* **Affordability Cap:** $\approx 7.0\%$ of income
* **Maximum Annual Premium Cost:** $\$35,000 \times 0.070 = \mathbf{\$2,450}$
$$\text{Premium as \% of Income} \approx \mathbf{7.0\%}$$
*(Note: These percentages are based on 2024-2025 FPL tables, where the cap percentages gradually increase with income.)*
---
## 3. Statement on Affordability of Healthcare
Affordability for both individuals is largely determined by their respective subsidies, which act very differently based on income and age.
| Individual | Affordability Statement | Key Takeaway |
| :---: | :--- | :--- |
| **Male (Age 30)** | Healthcare is **highly affordable**. The Premium Tax Credit (PTC) is extremely generous, limiting his premium contribution to about $3.0\%$ of his income. Crucially, the Cost-Sharing Reductions (CSR) he qualifies for will make his *actual healthcare usage* (copays, deductibles) very inexpensive, maximizing his real-world access to care. | **Highest Subsidies, Lowest Out-of-Pocket Costs.** |
| **Woman (Age 60)** | Healthcare is **affordable, but significantly less so** than for the younger, lower-income male. Although she receives a subsidy, her fixed contribution ($7.0\%$ of income) is more than double his, and her underlying, unsubsidized premium is much higher due to age. However, the CSR she qualifies for on Silver plans remains critical for managing her deductibles and potential medical costs. | **Lower Subsidies, Higher Premium Burden.** |
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