Heard of this little-known benefit of the new health law?

By Nancy MetcalfConsumer Reports

Q. My only income is $1,400 a month from Social Security Disability. I don’t have health insurance and I won’t be eligible for Medicare for almost two years. It’s cruel for the government to force me to buy coverage I can’t afford!

A. An upset-sounding woman called a network public affairs program I tuned into last night with this concern. Unfortunately, the expert taking the call got an important part of the answer wrong. He said, correctly, that she’d receive a subsidy for the premium—but added that she would still be facing an annual deductible of $4,000 or more.

Continue Reading Below

The last part of his answer was just plain wrong. One of the lesser-known benefits of the new health care law is that anyone with an income of less than 250 percent of the federal poverty level—as the lady who called in most assuredly has—not only gets a tax credit to lower the cost of the premium, but a huge break on out-of-pocket costs.

The caller didn’t reveal her age or location, but for illustration’s sake let’s say she’s 60 years old and lives in San Jose, Calif. This is not a random choice; California is running its own health insurance marketplace, Covered California, and it allows visitors to easily preview their subsidies and insurance choices before registering at the site. (If only Healthcare.gov, the federal site that's the portal to the insurance marketplaces of 36 states, could do as well.)

And it turns out that with her income of $16,800 a year, this lady’s insurance will cost next to nothing to buy and to use.

Health reform countdown: We are doing an article a day on the new health care law until Jan. 1, 2014, when it takes full effect. (Read the previous posts in the series.) To get health insurance advice tailored to your situation, use our Health Law Helper.

Because she brings in less than 150 percent of the federal poverty level for a one-person household, she will get a whopping advance tax credit of $677 that she can use right away to lower the cost of her monthly premium. An Anthem Blue Cross PPO with a sticker price of $722 per month for someone her age will cost her only $45 a month.

And the cost-sharing is incredibly low. The deductible: $0. She will pay $3 for a doctor visit, lab test, or generic drug prescription. Specialist visits, x-rays, and brand-name drugs will cost a whopping $5 apiece. She’ll pay 10 percent of the cost of infrequent, expensive services such as hospital stays or surgery, but once her out-of-pocket spending hits $2,250, the plan will pick up 100 percent of the costs for the rest of the year.

Curious whether you might qualify for cost-sharing subsidies? Use our free interactive tool, HealthLawHelper.org. If you are eligible, you’ll find out when you get your personalized set of options and recommendations for what steps to take next.

Got a question for our health insurance expert? Ask it here. It helps if you include the state you live in.

— Nancy Metcalf

Copyright © 2005-2013 Consumers Union of U.S., Inc. No reproduction, in whole or in part, without written permission. Consumer Reports has no relationship with any advertisers on this site.