New tax credits that take effect in January could help nearly 30,000 residents in Luzerne and Columbia counties offset the cost of health insurance premiums through the Affordable Care Act.
A report issued by Washington, D.C.-based Families USA, a non-partisan group that focuses on affordable health care, said new tax credits will be open to U.S. citizens who make up to four times the federal poverty level. The poverty level in 2013 is $11,490 for an individual and $23,550 for a family of four, according to the Federal Register.
About 896,000 residents will be eligible when open enrollment begins in October. The largest tax credits will be available to those with the lowest incomes based on a sliding scale.
In Luzerne and Columbia counties, which are grouped together in the report, more than 28,000 are eligible for tax credits. The vast majority of those eligible — 89.5 percent — are employed either full- or part-time.
About 36 percent of eligible residents are between the ages of 18 and 34. White, non-Hispanic residents make up nearly 90 percent of those eligible, and those earning two to four times the poverty level comprise 59 percent of eligible area residents.
Under the Affordable Care Act, Pennsylvanians who earn below 138 percent of the poverty level and are eligible for Medicaid will not be eligible for the new premium tax credits. The Families USA report assumes that states such as Pennsylvania will expand Medicaid coverage when calculating eligibility.
New state insurance marketplaces are expected to offer four tiers of coverage — bronze, silver, gold and platinum — and tax credits will be calculated based on silver-level plans. Pre-planned rates help protect families from spending more than a certain percentage of their income, according to Kathleen Stoll, director of health policy at Families USA.
Stoll said the tax credits provide help for those currently uninsured in purchasing a health care plan. Others who might find themselves with a bare bones, employee-based plan or a large premium now have a choice to enter the state marketplace.
“Health insurance is not a cheap product for low-income or middle-class families,” said Stoll. “A lot of what’s in the Affordable Care Act, I believe, will help lower premiums. The new premium tax credits will make being able to purchase and afford insurance a reality for millions of families.”
Eligibility rates for the new credits show working families will benefit most, Stoll said.
Coverage for younger adults also adds a layer of security for those entering the workforce who might not be immediately eligible for a work-based insurance plan, she said.
The report shows that many people who believed they were ineligible for assistance will find that they were wrong. “A family that’s struggling to afford insurance is really going to want to check this out and determine if they’re going to be eligible for some pretty significant help,” Stoll said.
Additional information on the open enrollment period and other health care changes is available at healthcare.gov.