By Kathryn Mayer
Nearly 26 million Americans will be eligible for premium tax credits that will help them pay for health coverage through the Patient Protection and Affordable Care Act, according to a new report.
The report from the national health consumer organization Families USA focuses on the consequences of one of health reform’s central provisions.
The tax credits under PPACA
will be determined on a sliding scale based on income. People with the lowest incomes will receive the largest tax credits, ensuring that those who need it most will get the greatest financial assistance. Premium tax credits take effect in January 2014, following an open enrollment period that begins in October of this year.
“The tax credit subsidies are a game changer,” said Ron Pollack, executive director of Families USA. “They will make health coverage affordable for huge numbers of uninsured families who would have been priced out of the health coverage and care they need.”
One glaring problem with the subsidies is though millions of Americans are eligible for them, most don’t know about them. Relatively few people are familiar with PPACA provisions that will provide tax credits to low- and middle-income consumers to help them purchase health coverage through state-run insurance exchanges.
According to Kaiser Family Foundation’s latest health tracking poll, 62 percent of Americans are aware that subsidy assistance is available to individuals under the health reform law. And about two-thirds of the uninsured
say they don’t understand how health reform will affect them.
Health reform requires virtually all Americans to have health insurance
or pay a fine beginning Jan. 1, 2014.
In its report, Families USA researchers urged states and the federal government to work closely together “to educate the public about how the new tax credits will work and to make it as simple as possible to connect people to this significant new source of help with the cost of health insurance.”
People with annual incomes between 200 and 400 percent of poverty (between $47,100 and $94,200 for a family of four in 2013) will account for more than half (about 56 percent) of those who will be eligible for subsidies, according to the report.
The vast majority of people who will be eligible for premium tax credits — about 88 percent — will be in working families.
Families USA also broke down the numbers by race. According to the report, about 58 percent of those who will be eligible for subsidies will be white, non-Hispanics. Nearly 23 percent of those who will be eligible who will be eligible will be Hispanics, and about 11 percent of those who will be eligible will be black, non-Hispanics. The remainder (roughly 8 percent) identify themselves as American Indian, Aleut or Eskimo, Asian or Pacific Islander.
The report was written by members of the Families USA staff using data from The Lewin Group.
Originally published on BenefitsPro.com