Tax Credits

  • 03.07.17

    How Affordable Care Act Repeal And Replace Plans Might Shift Health Insurance Tax Credits

    After its release, the Kaiser Family Foundation analyzed the new Republican bill, the American Health Care Act. The Kaiser Family Foundation finds that "Both the ACA and the American Health Care Act include tax credits in their approach. However, the law and the proposal calculate credit amounts differently: the ...

    After its release, the Kaiser Family Foundation analyzed the new Republican bill, the American Health Care Act. 

    The Kaiser Family Foundation finds that "Both the ACA and the American Health Care Act include tax credits in their approach. However, the law and the proposal calculate credit amounts differently: the ACA takes family income, local cost of insurance, and age into account, while the replacement proposal bases tax credits only on age, with a phase out for individuals with incomes above $75,000."

    The result of this change in legislation means that in general, people who are older, lower-income, or live in high-premium areas (like Alaska and Arizona) would receive less in tax credits under the new legislation than they do currently under the Affordable Care Act. While those who are younger, higher-income, or live in low-premium areas receive larger assistance under the AHCA than they currently do. 

    The figure below taken from the article shows the differences in tax credits by age and income:

    Kaiser Figure 1