People who purchase health plans on the health insurance exchanges may be eligible for subsidies, depending on one’s annual household income.  These sliding-scale subsidies offset one’s annual health premium.

The Obama Administration has marketed that individuals earning an annual household income between 100-400% of the Federal Poverty Level (FPL) will be eligible for subsidized health plans.  100-400% of the Federal Poverty Level translates as such:

Individuals: $11,000-$45,000 

Couples: $15,000-$62,000 

Family of four:  $23,000-$94,000  

Surprise, surprise – this information is misleading.  Young and healthy North Carolinians (ages 18-34) will not be seeing any subsidies beyond an income of roughly $35,000 (309% FPL).

Furthermore, the federal health law states that individuals earning below 250% of the Federal Poverty Level ($28,000 for an individual) will receive additional cost-sharing subsidies that will limit out-of-pocket expenses.  However, under the Budget Control Act, these subsidies will not be available to eligible individuals as promised in 2014.

Chris Jacobs, Senior Policy Analyst of the Heritage Foundation, reports that the required 7.2% cut in cost-sharing subsidy distribution will effect either eligible consumers or insurance companies:

 Individuals who have managed to enroll in subsidized health insurance will find they’ve been misled about their copays and deductibles. Families who currently think their plan will charge a $20 copayment for doctor visits may instead face a $25 charge when the sequester kicks in. Individuals who now believe they face maximum out-of-pocket costs of $2,000 may end up paying hundreds more.

Meanwhile, the Congressional Research Service states:

The impact of the sequestration is unclear.  Obamacare entitles certain low-income exchange enrollees to coverage with reduced cost-sharing and requires the participating insurers to provide that coverage.  Sequestration does not change that requirement.  Insurers presumably will still have to provide required coverage to qualifying enrollees but they will not receive the full subsidy to cover their increased costs. 

Read more here to learn why these cost-sharing subsidies are subject to the federal budget sequester.