Obamacare Subsidies: 17 Million Could Receive Them
NEW YORK (MainStreet) Nearly 17 million Americans could receive subsidies under Obamacare, according to a new study by the Kaiser Family Foundation, out of a possible 29 million potential enrollees.
The report studied individuals who currently either don't have insurance or buy it on their own ("non-group purchasers"). Of that group, anyone with incomes between 100 and 400% of the federal poverty level can qualify for a subsidy in the form of a tax credit. Someone who makes less than 138% of the federal poverty level might qualify for Medicaid instead, depending on state law.
The size of a subsidy is pegged to a household's income, as well as the local insurance prices state-by-state. The Affordable Care Act establishes caps on how much anyone can pay for insurance premiums, from two percent for anyone earning at the federal poverty level up to 9.5% at four times that. An individual is eligible for tax subsidies to cover premiums above that maximum.
For example, starting next year an individual making $22,980 (two times the current poverty guideline) has a premium cap of approximately $114 per month. If that person faces higher actual insurance premiums, he or she will become eligible for a subsidy to make up the difference. This will result in different subsidies for individuals and families based on age and state.
Texas, California and Florida will have the most residents qualify for tax credits at more than a million people each. In fact, more than two million Texas residents will qualify for government aid on the exchanges.
On a per-capita basis, Alaska, Louisiana and Mississippi stand to have nearly seven in ten enrollees eligible for subsidies, the highest percentages in the nation.
Acceptance of these tax credits may range widely from state to state, and much of the success of the ACA will have to be measured on a local basis. Enrollment of young and healthy people, many of whom will qualify for the new subsidies, will be necessary to offset the newly-eligible sick. Since insurance is a heavily state regulated marketplace, the risk pool in Texas has no impact on the pool in Missouri, and vice versa.
--Written for MainStreet by Eric Reed, a freelance journalist who writes frequently on the subjects of career and travel. You can read more of his work at his website www.wanderinglawyer.com.