Study Finds 60% of Americans eligible for credits to purchase Insurance on Exchange
According to a report released Tuesday by the Kaiser Family Foundation, an estimated 17 million individuals will be eligible for some sort of tax credit when they purchase an individual plan on the Health Insurance Exchange: “healthcare.gov.” When taking into account that 29 million individuals make up the individual market on the exchange, 60% of the potential market will be eligible to receive a credit to purchase a health plan.
The Congressional Budget Office (CBO) projects that 7 million people will enroll in health insurance exchanges in 2014, including 6 million who will be receiving tax credits to subsidize their premiums. Based on the estimates above by Kaiser, the enrollment levels means 25% of potential exchange enrollees would choose to participate in the first year of Obamacare, and a slightly higher proportion of people would be eligible for tax credits (35%) when buying coverage.
The estimates are important as we set expectation around the number of people that sign up this year for Obamacare. The CBO along with Kaiser realize there will be a ramp up period and the expectation is that it will take several years before the majority of those that are uninsured enroll into plans that are part of the exchange. The CBO projects the number of people receiving tax credits in exchanges to triple by 2016, as the number of enrollees expands.
According to the report, “In the early stages of open enrollment since October 1, 2013 it’s clear that the enrollment process is working more smoothly in some state-based exchanges than in others.” Some factors promoting this are “states running their own exchanges have received funding/grants not only from the government but also in some cases the states themselves to setup the exchange along with cooperation from the local government.” This is far different than state where the federal government is managing and running the exchange for a state that opposed to the law. This has resulted in limited budget for implementation of the federal marketplace in state where the local government opposes the law. This may cause a longer delay in those state residents getting the necessary and accurate information to sign up for a plan.
As it stands Texas, California, Florida, New York, and Pennsylvania — represent more than 40% of the individuals who would qualify for tax credits across the United States. California and New York are operating their own insurance exchanges while the other states are part of the federal system. The report from Kaisers includes breakdowns of how many people are eligible for tax credits in every state.
The Patient Protection and Affordable Care Act provide two kinds of subsidies. These subsidies are based on household income. Individuals who earn up to 400 percent of the federal poverty level, or about $46,000 for a single person, are eligible for a tax credit for their monthly premium to ensure the cost of their health insurance is not more than 9.5% of their house hold income. Additionally, individuals who earn up to 250 percent of the poverty level, or about $29,000, can get an additional cost sharing reduction: The Cost Sharing Reeducation is a discount that lowers the amount you have to pay out-of-pocket for deductibles, coinsurance, and co-payments. You can get this reduction if you get health insurance through the Marketplace, your income is below a certain level, and you choose a health plan from the Silver plan category. This is a synopsis of a larger report and certain sections may have been left out. If you are interested in reading the full report Please click the following link Kaisers State by State Subsidy Report
User our Subsidy Calculator tool to see if you would qualify for a subsidy.