Report: 2.6 Million Texans Could Get Health Insurance Subsidy

Nearly 2.6 million Texans could qualify for tax credits to purchase health insurance in 2014, according to a report released Thursday by Families USA, a nonprofit that advocates for health care consumers.

The tax credits will be offered through the health insurance exchange — an Orbitz-style online marketplace for health insurance — that the federal government plans to launch as part of the Affordable Care Act in October. Beginning in January, families with an income of up to 400 percent of the federal poverty line, between $47,100 and $94,200 for a family of four, will be eligible for a tax credit subsidy to purchase insurance through the exchange. The tax credits will be offered on a sliding scale, so that lower-income families will receive larger credits.

“These are typically the families where folks are working, sometimes more than one job,” U.S. Rep. Pete Gallego, D-Alpine, said of the report. “Regardless of where you are on the political spectrum, I think that’s something we can all support.”

Nearly 5.8 million Texans — nearly a quarter of the state's population — are uninsured. The Health and Human Services commission estimates the tax credits offered through the health insurance exchange and other provisions in the Affordable Care Act will lower that rate to 16 percent. If Texas also expanded Medicaid — an unlikely scenario given Gov. Rick Perry’s opposition — the uninsured rate could be lowered to 12 percent. 

“Given the large number of people in Texas that are uninsured, many of whom are poor, this is an extraordinary opportunity,” said Ron Pollock, executive director of Families USA. He said it was “short-sighted” for the state’s leadership to oppose Medicaid expansion, as it would bring billions of federal dollars to the state, and increase job opportunities.

Perry says that Medicaid is a broken system and has called the Medicaid expansion of federal health reform “fiscal coercion.”

If Texas does not expand Medicaid, an additional 422,000 people with incomes between 100 and 138 percent of the federal poverty line will qualify for a tax credit, said U.S. Rep. Lloyd Doggett, D-Austin. Because of a loophole created in the law when the U.S. Supreme Court ruled that states could opt out of the Medicaid expansion, individuals below the poverty line would not be eligible for assistance.

“Those who are poor, but are below the poverty level, will not have a means to gain health insurance without Medicaid expansion,” said Doggett. “That’s why it’s so important that we find an alternative in the event that this Legislature concludes and no action has been taken on Medicaid expansion.”