critical that the imposed penalty amount is too low to motivate many to buy insurance, particularly if the premiums associated with the essential health benefits (EHB) are high (Laszewski, 2010).

Key Dollar Triggers for Individuals (in 2011 dollars)

Medicaid Eligibility

Eligibility: 138 percent federal poverty level (FPL) ($15,028 for individual, $30,843 for family of four in 2011)

No premium and nominal cost sharing

Penalty for Not Having Insurance in 2016

Is greater of

• $695 per person, up to $2,085 family OR 2.5 percent adjusted gross income share of premium for lowest-cost option

Exemption for financial hardship:

• Share of premium for lowest-cost option. 8 percent of income ($3,551 for median income), AND

• Those with incomes below tax filing threshold ($9,350 for single; $18,700 for couples in 2009)

Exchange Subsidy

Eligibility: 139-250 percent FPL ($15,137-$27,225 for an individual or $31,067-$55,875 for a family of 4 in 2011)

• Sliding scale tax credits limit premium costs to 3-8.05 percent of income; sliding scale cost-sharing credits

Eligibility: 251-400 percent FPL ($27,334-$43,560 for an individual; $56,099-$89,400 for a family of four in 2011)

• Sliding scale tax credits limit premium costs to 8.05-9.5 percent of income; no cost-sharing credits

Exchange Nonsubsidized:

Eligibility: >400 percent FPL

• No sliding scale tax credit and no cost-sharing credits. No annual limit on deductibles specified in legislation

NOTE: The FPL ranges are in current 2011 dollars. The triggers will be in 2014 dollars.

Choice of Insurance

Individual consumers desiring to participate in private plans will retain their choice of insurer and type of plan to be purchased, and they are not required to purchase plans through the health insurance exchanges. The

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