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How Much Will Obamacare Subsidies Save You?

One big question about the Affordable Care Act has been how much the government will pay in subsidies. A recent report from the Department of Health and Human Services looked into that question, giving some answers about how much people should expect the government to chip in toward their health-insurance premiums.

In the following video, Dan Caplinger, The Motley Fool's director of investment planning and author of the special free report "Everything You Need to Know About Obamacare," talks with Motley Fool health-care bureau chief Max Macaluso about subsidies and how much of the cost of health insurance they'll cover. Dan reveals that 27-year-olds with incomes of $25,000 should expect subsidies to cover about 32% of the cost, cutting their monthly premium costs to $145. For a family of four earning $50,000, the subsidy was about double, cutting costs by 64%.

Dan notes that the biggest savings came in high-cost states such as Wyoming, Alaska, and Mississippi. Subsidies tended to be larger for families than for singles, especially in lower-cost states. The net effect of the subsidies was to balance out disparities across states, going a long way toward flattening out premium costs nationwide.

Max and Dan then turn to the companies that could benefit from subsidies. Insurance companies Humana (NYSE: HUM  ) , UnitedHealth Group (NYSE: UNH  ) , and WellPoint (NYSE: ANTM  ) are all poised to gain if subsidies encourage more people to enroll in Obamacare policies, with WellPoint arguably benefiting the most since it has been most aggressive in embracing Obamacare exchanges. At the same time, Tenet Healthcare (NYSE: THC  ) , HCA Holdings (NYSE: HCA  ) , and other hospital operators could also see big profit gains, as more people having coverage should mean fewer losses for hospitals and other medical providers to absorb as bad debt.

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Read/Post Comments (18) | Recommend This Article (0)

Comments from our Foolish Readers

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  • Report this Comment On September 28, 2013, at 6:50 PM, sheilathatsme wrote:

    " Dan reveals that 27-year-olds with incomes of $25,000 should expect subsidies to cover about 32% of the cost, cutting their monthly premium costs to $145." Considering that a 27 year old in NC was paying 46 dollars and change each money for quality healthcare I really do not see any savings just a whole lot of stealing from peoples pockets but that's democrats for ya.

  • Report this Comment On September 28, 2013, at 7:30 PM, spintreebob wrote:

    by definition a subsidy will not save taxpayers or investors anything. It destroys the job market and hurts us financially beyond our increasing tax burden.

  • Report this Comment On September 28, 2013, at 7:45 PM, KingRana wrote:

    “Welcome to AmeriCare……Long Live Obama………God Bless America”

  • Report this Comment On September 28, 2013, at 7:46 PM, jnbhall wrote:

    How much will subsidies save you? Well if you work nothing. its not the governments money idiots its yours. There taking your tax dollars and giving it back to you so you will feel all warm and fuzzy about all the money you will be saving. "FOR NOW"!

  • Report this Comment On September 28, 2013, at 7:55 PM, flakyme wrote:

    How much the government will chip in??? Don't you mean how much the middle class will be forces to pay with extra taxes that the progressives and BO have imposed?

  • Report this Comment On September 28, 2013, at 8:14 PM, dumpsterfire wrote:

    they don't know how much it will cost because they don't know how many people will enroll. but that doesn't stop them from quoting you prices... good luck with that.

  • Report this Comment On September 28, 2013, at 8:26 PM, Maxed2DT wrote:

    When you consider that most poor people go to the hospital emergency rooms when they are sick or injured and without insurance, guess who pay their bills? Yes, you do and the hospital writes it off as a loss thus raising the bills for all people with insurance. Conservatives are not all stupid, they know this!

  • Report this Comment On September 28, 2013, at 8:29 PM, Maxed2DT wrote:

    Dumb conservatives would rather spend trillions on unnecessary wars, but hate the idea that America might spend a dime to help it's own people! Get real!

  • Report this Comment On September 28, 2013, at 8:38 PM, dwc1958 wrote:

    Meanwhile Obama has robbed Medicare of an estimated 800 billion to pay for Obamacare and medicare. A medicare we were forced by law to pay into yet, because of Obamacare, get less and less. How the heck is that legal without our consent? If I did that, I would be in Jail.

  • Report this Comment On September 28, 2013, at 8:40 PM, dwc1958 wrote:

    A lot of those poor people that have been refered to are illegal aliens that come here and for starters get their babies born for free and citizenship for the kid. What a rip off the socialists are pulling us.

  • Report this Comment On September 28, 2013, at 8:43 PM, dwc1958 wrote:

    The end game is so that socialism will take over. Destroy all free markets , individiualism, and ethics and you have zilch.

  • Report this Comment On September 28, 2013, at 9:43 PM, julio2 wrote:

    Why are the motley fools so liberal? They used to be politically neutral and now they are clearly advocates for the democrats in Washington.

  • Report this Comment On September 28, 2013, at 10:07 PM, MoltarRocks wrote:

    Zilch! I don't get any subsidy.

  • Report this Comment On September 28, 2013, at 10:21 PM, tristinstone wrote:

    It wont cost me a dime! Me and my wife are moving to Panama in March, we have already sent most of our money there for the last 9 years. All we have to do is sell all our rental properties, our house, our cars and truck. We are going to live on a 80 acre ranch with 3 other American couples who are also sick of Obama!

  • Report this Comment On September 28, 2013, at 10:46 PM, badlandsbabe wrote:

    Headline is wrong. Should read, "How much will Obamacare COST you." Subsidies are not free, someone has to pay. The ones paying their own way will pay more and what that doesn't cover will be added to our debt. My taxes are going up because my company provided insurance will now be counted as income. Thanks a lot Obama

  • Report this Comment On September 29, 2013, at 12:06 AM, warpig6558 wrote:

    How did we get to this point where we call Subsidies a saving for taxpayers. Someone is paying for another persons benefit. I'm getting tire of paying for other peoples benefits.

  • Report this Comment On September 29, 2013, at 1:19 AM, gulfcoastrebel wrote:

    This is a curious article: the words don't answer the question the headline poses. For a direct answer to 'how much will subsidies save you?' go to the Kaiser Family website's subsidy calculator and put in your own income, family size, and age. It will give you the unsubsidized cost of your plan, the amount of your subsidy, the amount of premium you will have to pay, and the percent of your income that that represents. If your income is below 400% of the Federal poverty level for the # of persons in your family, you will get subsidies to cover all of the premium but from 2% to 9.5% of your annual income. I don't think it matters what state you live in for that to be true. But you can go and check me on that.

  • Report this Comment On September 29, 2013, at 1:40 AM, illegalnotlegal wrote:

    I have checked the rates here and they are low to free for a lot of people. What is an interesting fact is the nondisclosure by the media and in fact the fools here is that the lower you pay the more you have to participate percentage wise. Most lower cost or free plans require you to pay 30 percent of the bills while the taxpayers will pay the other 70 percent for you. The better plans will make you pay 20 percent with taxpayers picking up the other 80 percent for you.

    Be careful with your selection as it could destroy your family especially if you have to pay 30 percent of all your families Dr and Hospital bills!

    I wish the fools and media would discuss this. I noticed Forbes just had an article about this.

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