Help Is at Hand:
New Health Insurance Tax Credits
Starting in 2014, the Affordable Care Act will extend health coverage to millions of Americans. This will be done, in part, by offering tax credits to help low- and middle-income people, including many who were previously uninsured, afford private quality health coverage. The premium tax credits actually work like a subsidy rather than like a typical tax credit: individuals who don't owe taxes can still receive the subsidy, and they will receive the subsidy when they buy health insurance--not as a reimbursement after filing taxes.
Most of the people who will be eligible for the tax credits will be in working families and will have incomes between two and four times poverty (between $47,100 and $94,200 for a family of four based on 2013 poverty guidelines). However, because the size of the tax credits will be determined on a sliding scale based on income, those with the lowest incomes will receive the largest tax credits, ensuring that the assistance is targeted to the people who need it most.
Every state will have a new health insurance marketplace (also called an exchange) that will make it easier for residents to find health coverage that meets their needs, and the tax credits will help people looking for coverage in their state's marketplaces better afford such coverage.
Families USA commissioned The Lewin Group to use its widely respected Health Benefits Simulation Model to estimate how many people across the country could benefit from the new premium tax credits in 2014.