More than 2 million Texans are eligible for tax credits to purchase health coverage in the federal insurance marketplace, according to a new report released Tuesday by the Henry J. Kaiser Family Foundation.
Texas is one of 26 states that chose not to establish a state-run health insurance marketplace under the Affordable Care Act and to instead rely on a federal one. Texas now has more people eligible for federal premium tax credits next year than any other state, according to the report. The credits are available to those with incomes between 100 and 400 percent of the federal poverty line who meet some other criteria.
Cynthia Cox, a policy analyst for Kaiser, said the average Texas family would receive a tax credit of $2,700 per year if they purchased coverage in the federal marketplace. How much they would pay for insurance depends largely on where they live and what policy they select.
Cox said that along with being a large state, Texas has the most people who would qualify for tax credits because the state did not expand Medicaid to poor adults under federal health reform — an optional provision of the law — and has the highest rate of people without health insurance in the nation. Nearly a quarter of the state population is uninsured.
"A lot of those people that would have gone into Medicaid if Texas had expanded the program are going to be getting tax credits," Cox said.
The Affordable Care Act requires most Texans to carry health insurance by March 31, though adults below the poverty line aren't required to carry health insurance and are not eligible for tax credits, meaning they will likely remain uninsured.
While the Kaiser report argues that tax credits will go a long way in making coverage affordable for many Texans with low incomes, John Davidson, a health care policy analyst for the conservative Texas Public Policy Foundation, said many people would receive a subsidy that wouldn’t substantially affect their premium costs — especially young people and people making more than 250 percent of the federal poverty level.
“The Affordable Care Act makes insurance more expensive for more Texans, and the law creates winners and losers, the losers being young people with jobs,” Davidson said.
Lucy Nashed, a spokeswoman for Republican Gov. Rick Perry, said of the study: "It's impossible to accurately estimate anything given the abject failure of Obamacare and its rollout.”
"Obamacare is supposed to reduce the number of people without health insurance, and we are seeing the exact opposite happen," she said in a statement. "Not only is the cost of health insurance skyrocketing, but people across income levels are seeing their coverage canceled. A small subsidy to buy a higher-priced product is small consolation.”
The Kaiser study considered factors, including how many people in each state lack insurance, their income levels and whether or not a state is expanding Medicaid. The report says almost two-thirds of Texas' estimated market for insurance under federal health reform would qualify for the credit. According to the report, only two other states, Florida and Colorado, had more than a million people who would qualify for the credit. Nationally, roughly 60 percent of the 28.6 million people in the estimated market would qualify for the credit, according to the report.
Kaiser also released a ZIP code-specific health insurance subsidy calculator that can be used to estimate premiums and tax subsidies in the insurance marketplace. It considers factors such as age, family size and income.
This story was produced in partnership with Kaiser Health News, an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.