A new report by Families USA shows nearly 200,000 people will be eligible in Nebraska for health care premium tax credits under current reform. Deputy Executive Director and Director of Health Policy for Families USA Kathleen Stoll co-authored the report that shows tax cuts in the health reform law will significantly reduce the cost of private health insurance for individuals and families in the state.
“In Nebraska, there are 187,000 people that we estimate that will be eligible for these premium tax credits that help pay for health care coverage for individuals and families. That 187,000 is our estimate for how many people will be eligible in Nebraska in 2014.”
Stoll gives us an example of the eligibility guidelines.
“For families up to 400% of poverty. Let me translate that for you. About 90,000 dollars annual income for a family of four. We estimate that about 97% of the folks that will be eligible for these tax credits are in working families. What you will do is go to the new exchanges, which is a regulated market place and there will be an array of different insurance products that you can buy. You can pick out what works best for your family and then you get a significant tax credit to pay for it.”
Tax credits will be available to individuals and families without health insurance who have incomes between 122 and 400-percent of poverty… that ranges from $14,400 and $43,000 for and individual and between $29,325 and $88,200 for a family of four. Stull uses an example of a family of four making 35-thousand dollars a year.
“Family of four, 35-thousand dollars annual income. They want to buy an insurance plan that costs $15,000. They will get $13,600 in this new premium tax credit, tax relief and premium assistance, $13,600 dollars toward the purchase of that 15-thousand dollar plan so these are very robust.”
Stull says if you already have health insurance through your employer, you still may be eligible for tax credits.
“And if you have to spend more than 9.8% of your family income for your share of the coverage your employer offers you, then you have the choice to go into these new exchanges where there will be an array of insurance plans available and get the premium tax credit. Again, if you were making 35-thousand dollars, you might see a tax credit of $13 or $14,000 dollars to purchase a plan that runs $15, $16,000.”
Stull says the health reform law saves the government money by reducing the federal deficit about $143 billion over 10 years. The big question is how can these robust tax credits be offered and still save the federal budget deficit money.
“The key is really a number of provisions in the law that say, first health care has to be provided in a more coordinated way and people need to not have their blood drawn every time they have a problem with their hand, their foot or toe. One blood test and let the doctors share it. We try to reduce medical errors in hospitals. There are a lot of unnecessary medical errors. We know that about $700 billion dollars a year is for unnecessary repetitious care.”
Stull says about half of those that will receive tax credits will go to people currently insured but are struggling to afford the costs. Credits will also be offered to the uninsured. Undocumented immigrants will not be eligible for premium tax credits.