Tax credits will help 3 million Californians pay for health insurance

Sacramento Business Journal –

April 9, 2013:

About 3 million Californians — including 146,900 in the four-county Sacramento area — will be eligible for premium tax credits to help them pay for health insurance next year, according to a new study by Families USA.

The subsidies will be paid directly to the health plans in which individuals and families enroll, offsetting the total cost of premiums. This way, they don’t have to lay out the money up front and go to the IRS to recoup some of it.

“The federal tax credits are a game changer,” Ron Pollack, executive director of Families USA, said in a phone call with reporters Tuesday morning. “They make health insurance affordable to a huge number of individuals and families — and they make it more affordable to people currently buying health insurance on their own.”

Every state will have a new insurance marketplace next year that will make it easier to get health coverage. The new exchanges, including Covered California, will help individuals and families find coverage that meets their specific needs. The tax credits will help people shopping there better afford coverage.

Premium tax credits will help Californians with incomes up to four times the federal poverty level, which translates to annual income of up to $46,000 for individuals and $94,200 for a family of four. Tax credits will take effect in January 2014, following an open enrollment period that begins in October.

The size of the tax credits will be determined on a sliding scale based on income, so those with the lowest incomes will get the biggest tax credits. For example, about family of four will pay no more than about $250 in premiums a month, after the subsidy is applied, Pollack said.

Estimates in the new study were prepared by The Lewin Group for Families USA.

The overwhelming majority of tax subsidy beneficiaries — 86.3 percent — will be working families with at least one breadwinner, Pollack said.

A total of 100,530 people in Sacramento County are expected to be eligible for tax subsidies. Other local figures include: 19,940 people in Placer County, 13,350 in El Dorado and 13,080 in Yolo.

“We believe the tax credits are transformative,” Anthony Wright, executive director at Health Access, said on the media call. “No longer will consumers pay based on how sick they are, but based on their income. This will provide fiscal relief to people who are uninsured and those who are insured but have difficulty paying for it.”

Source: John & Rusty Report via Choice Admin