By NextBestFitHousehold: Self-employed, $80k, unsubsidized Marketplace
Single freelancer above the subsidy cliff buying their own plan.
Result
+$2,175
How it's calculated
| # | Step | Arithmetic | Value |
|---|---|---|---|
| 1 | AGI today | $80,000 | |
| 2 | Employer premium (hidden compensation) | $0 | |
| 3 | Other premiums end Marketplace, Medigap, and Medicare Part B/D premiums. | $6,500 | |
| 4 | Covered out-of-pocket costs end Deductibles, copays, coinsurance, and uncovered dental, vision, and hearing. | $2,500 | |
| 5 | Income tax on newly taxable compensation Premiums were paid with pre-tax dollars; wages are taxed. Federal + state. | −$1,755 | |
| 6 | Income-based health premium 4.0% of AGI above the $16,000 exemption for a household of 1. | −$2,820 | |
| 7 | Self-employed health payroll tax Employer-equivalent tax on net self-employment income above $50,000. | −$2,250 | |
| 8 | Net change per year, long run | $2,175 | |
| 9 | Net change per year, Year 1 | $2,175 |
Trade-off: The self-employed health insurance deduction disappears along with the premium.