Americans who buy health insurance outside their jobs next year can expect an average tax credit of nearly $2,700 to help them obtain coverage on the new state insurance marketplaces, according to an analysis by the nonpartisan Kaiser Family Foundation.
The tax credits will vary by household income and family size, as well as the cost of coverage in a particular state and local area.
About 26 million low- and moderate-income people will be eligible for the tax credits to help pay for individual coverage next year on their state marketplaces, the online health insurance shopping malls created by the Affordable Care Act.
The credits will go to people with incomes between 100 percent and 400 percent of the federal poverty level. This year, that’s an annual income of about $11,500 to nearly $46,000 for an individual, and roughly $23,500 to $94,200 for a family of four.
Kaiser, a private, nonprofit health care research organization, estimates that 48 percent of the people who now have individual coverage will be eligible for the tax credit, which will average $5,548 for this group.
Marketplace plans will be divided into four categories, based on the portions of medical expenses they cover. Each category will offer a variety of plans with differing costs: Bronze plans will cover 60 percent of medical expenses, silver plans 70 percent, gold plans 80 percent and platinum plans 90 percent. Plan members pay the remaining portions.
The amount of tax credit will be based on the second-lowest-priced silver plan in their area, known as the "benchmark plan." Kaiser estimates that the national average benchmark plan for a 40-year-old next year will be $3,857, or $321 per month.
The Affordable Care Act requires most Americans to have health insurance in 2014 or face a fine. Those with job-based insurance or government coverage through Medicaid, Medicare or another program probably don’t have to worry.
But more than 15 million people with coverage on the individual market will face major changes in the way they buy insurance next year.
The health care law completely makes over the individual market next year through changes designed to make newly issued coverage more generous, affordable and transparent.
The changes guarantee access to individual coverage regardless of current or past health problems, require plans to cover at least 60 percent of medical costs, limit annual out-of-pocket costs, and outlaw annual and lifetime spending limits for benefits.
By Tony Pugh
McClatchy Washington Bureau