Insurance
Premium tax credit
The gap between the benchmark premium and the share of income you are expected to pay.
The Formula
Subsidy = benchmark premium - income x applicable percentage
The gap between the benchmark premium and the share of income you are expected to pay.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| B | Benchmark premium | currency | Annual cost of the benchmark silver plan. |
| I | Household income | currency | Income used to set the credit. |
| p | Applicable percentage | percent | Share of income you are expected to pay. |
What Each Symbol Means
Bcurrency
Benchmark premium
Annual cost of the benchmark silver plan.
Icurrency
Household income
Income used to set the credit.
ppercent
Applicable percentage
Share of income you are expected to pay.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate health insurance subsidy page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Calculate Health Insurance Subsidy, filed under Finance. Every number the guide produces comes from substituting into this one line.