EMBargoed until 12 Noon EDT Thursday, April 11, 2013 New Health Insurance Tax Credits in Texas Families USA Help Is at Hand: New Health Insurance Tax Credits in Texas (C) April 2013 by Families USA This publication is available online at www.familiesusa.org. Families USA 1201 New York Avenue NW, Suite 1100 Washington, DC 20005 Phone: 202-628-3030 Fax: 202-347-2417 Email: info@familiesusa.org www.familiesusa.org Cover Design: Nancy Magill, Families USA Help Is at Hand: New Health Insurance Tax Credits in Texas S tarting in 2014, the Affordable Care Act will extend health coverage to millions of Americans. This will be done, in part, by offering tax credits to help low- and middle-income Americans afford private coverage. These new tax credits, which will offset a portion of the cost of health insurance premiums, will soon become a reality, allowing many previously uninsured Texans to purchase quality health coverage. This report takes a closer look at these premium tax credits in Texas, which will help Texans with incomes up to four times the federal poverty level ($94,200 for a family of four in 2013)1 afford coverage. The unique structure of the tax credits means that people will be protected from having to spend more than a set percentage of their income on health insurance premiums. These premium tax credits will take effect in January 2014, following open enrollment that begins in October 2013. Families USA commissioned The Lewin Group to use its widely respected Health Benefits Simulation Model to estimate how many people in Texas and across the country could benefit from the new premium tax credits in 2014. We found that nearly 2.6 million Texans will be eligible for the tax credits in 2014. Most of the people who will be eligible for the tax credits will be in working families and will have incomes between two and four times poverty (between $47,100 and $94,200 for a family of four based on 2013 poverty guidelines). However, because the size of the tax credits will be determined on a sliding scale based on income, those with the lowest incomes will receive the largest tax credits, ensuring that the assistance is targeted to the people who need it most. Every state, including Texas, will have a new health insurance marketplace (also called an exchange) that will make it easier for residents to gain health coverage. Though these new state marketplaces may look different, all of them will help individuals and families find coverage that meets their specific needs. The tax credits will help people who are looking for coverage in their state's marketplace better afford such coverage. In order to maximize the number of people who receive the new tax credits, Texas and states across the country will need to develop robust outreach programs to educate consumers about this new help. The state marketplaces will need to offer insurance shoppers consumer-friendly, simple online enrollment processes, and they'll need to build complementary networks of assisters who can provide in-person, one-on-one help to anyone who needs it. 2 Help Is at Hand: New Health Insurance Tax Credits in Texas As this key part of the Affordable Care Act takes effect, many Texans will enjoy tax relief. They will also enjoy the peace of mind that comes with knowing that they and their family members have affordable health insurance--insurance that they can depend on even if they experience changes in income or become unemployed. The following examples illustrate the amount of assistance that different kinds of people could receive. For more details on the how to calculate premium tax credits, see "How Much Will the Tax Credits Be Worth?" on page 16. Example Jane Smith, age 45, no children, annual income of $23,000 (about 200 percent of poverty): If the annual premium for the silver reference plan in the state marketplace in Jane's zip code is $5,000, Jane's out-of-pocket contribution for premiums for the silver reference plan would be about $1,450 (or about $121 a month). The remainder of her premium for the silver reference plan would be covered in the form of a tax credit of $3,550 (or that amount could be credited toward the premiums for a more or less expensive plan of her choice). Example The Johnsons, a family of four (two adults, two children under age 18), annual income of $35,300 (about 150 percent of poverty): If the annual premium for the silver reference plan for family coverage in the state marketplace in the Johnsons' zip code is $12,500, the Johnsons' out-of- pocket contribution for premiums for a silver reference plan would be about $1,410 (or about $118 a month). The remainder of their premium for the silver reference plan would be covered in the form of a tax credit of $11,090 (or that amount could be credited toward the premiums for a more or less expensive plan of their choice). Note that consumers will be able to select any health insurance plan that is available through the state marketplace in their area, and the law guarantees that there will be a range of plans with different coverage terms and different prices. Each family can pick the plan that meets their needs and still receive the same substantial premium tax credit. How much a family will have to spend on premiums will vary depending on whether they choose a plan that is more or less expensive than the silver level reference plan. Help Is at Hand: New Health Insurance Tax Credits in Texas Key Findings Beginning in January 2014, new tax credits will be available that will significantly reduce the cost of private health insurance for individuals and families in Texas. Numbers of People Eligible for the Premium Tax Credit ?? Statewide, nearly 2.6 million Texans will be eligible for these new premium tax credits in 2014 (see Table 1). ?? People with annual incomes between 200 and 400 percent of poverty (between $47,100 and $94,200 for a family of four in 2013) will constitute more than half (about 53 percent) of the Texans who will be eligible for premium tax credits (see Table 1). Table 1. Texans Eligible for Premium Tax Credits, by Income, 2014 Income as a Percent of Federal Poverty Level Number in Income Group Eligible Income Group As a Percent of Those Eligible 0-199% 1,205,150 46.7% 200-399% 1,374,710 53.3% Total 2,579,810 100% Notes: Estimates prepared by The Lewin Group for Families USA (methodology available upon request). Data are for those with incomes below 400 percent of the federal poverty level. Numbers may not add due to rounding. Help for Working Families ?? The vast majority of Texans who will be eligible for premium tax credits--about 88 percent--will be in working families. ?? Statewide, nearly 2.3 million people, the majority of Texans who will be eligible for premium tax credits, will be in families with a worker who is employed, either full- or part-time (see Table 2 on page 4). 3 4 Help Is at Hand: New Health Insurance Tax Credits in Texas Table 2. Texans Eligible for Premium Tax Credits, by Employment Status, 2014 Employment Number in Employment Group Status Employment Group As a Percent of Eligible Those Eligible Employed* 2,272,510 88.1% Not Employed* 307,320 11.9% Total 2,579,810 100% Notes: Estimates prepared by The Lewin Group for Families USA (methodology available upon request). Data are for those with incomes below 400 percent of the federal poverty level. Numbers may not add due to rounding. * The category "employed" includes those employed both full- and part-time. "Not employed" includes those out of the workforce and those not looking for work. Help for All Ages ?? Premium tax credits will be available to Texans in all age groups, from hardworking Texans who are supporting families to young people just starting their careers (see Table 3). ?? Young adults are the likeliest age group to be eligible for premium tax credits, making up approximately 35 percent of all those who will be eligible (see Table 3). Table 3. Texans Eligible for Premium Tax Credits, by Age, 2014 Age Group Number in Age Group Eligible Age Group as a Percent of Those Eligible Under 18 642,960 24.9% 18-34 914,110 35.4% 35-54 749,440 29.1% 55 and over 273,370 10.6% Total 2,579,810 100% Notes: Estimates prepared by The Lewin Group for Families USA (methodology available upon request). Data are for those with incomes below 400 percent of the federal poverty level. Numbers may not add due to rounding. Help Is at Hand: New Health Insurance Tax Credits in Texas Help for All Races and Ethnicities ?? About 37 percent of the Texans who will be eligible for premium tax credits will be white, non-Hispanics (see Table 4). ?? Approximately 10 percent of the Texans who will be eligible will be black, nonHispanics (see Table 4). ?? Nearly half (about 48 percent) of the Texans who will be eligible will be Hispanics (see Table 4). ?? Approximately 5 percent of the Texans who will be eligible will identify themselves as being American Indian, Aleut or Eskimo, Asian or Pacific Islander, or a member of more than one group (see Table 4). Table 4. Texans Eligible for Premium Tax Credits, by Race/Ethnicity, 2014 Racial/Ethnic Group White, Non-Hispanic Black, Non-Hispanic Hispanic Other* Total Number in Racial/Ethnic Group Eligible 943,920 Racial/Ethnic Group As a Percent of Those Eligible 36.6% 246,550 9.6% 1,249,680 48.4% 139,710 5.4% 2,579,810 100% Notes: Estimates prepared by The Lewin Group for Families USA (methodology available upon request). Data are for those with incomes below 400 percent of the federal poverty level. Numbers may not add due to rounding. * The category "other" includes those who identify themselves as American Indian, Aleut or Eskimo, Asian or Pacific Islander, or a member of more than one group. 5 6 Help Is at Hand: New Health Insurance Tax Credits in Texas Texas County Locations 1 Armstrong, Briscoe, Carson, Castro, Childress, Collingsworth, Dallam, Deaf Smith, Donley, Gray, Hall, Hansford, Hartley, Hemphill, Hutchinson, Lipscomb, Moore, Ochiltree, Oldham, Parmer, Roberts, Sherman, Swisher, Wheeler 2 Potter 3 Randall 4 Bailey, Cochran, Crosby, Dickens, Floyd, Garza, Hale, Hockley, King, Lamb, Lynn, Motley, Terry, Yoakum 5 Lubbock 6 Archer, Baylor, Clay, Cottle, Foard, Hardeman, Jack, Knox, Montague, Wilbarger, Wise, Young 7 Wichita 8 Cooke, Grayson 9 Fannin, Hunt 10 Delta, Franklin, Hopkins, Lamar, Morris, Red River, Titus 11 Bowie, Cass 12 Camp, Marion, Rains, Upshur, Van Zandt, Wood 13 Gregg, Harrison 14 Smith 15 Cherokee, Panola, Rusk 16 Jasper, Newton, Sabine, San Augustine, Shelby, Tyler 17 Angelina, Nacogdoches 18 Anderson, Henderson 19 Falls, Freestone, Hill, Limestone, Navarro 20 Kaufman, Rockwall 21 Collin 22 Denton 23 Dallas 24 Ellis 25 Parker, Tarrant 26 Johnson 27 Bosque, Callahan, Comanche, Eastland, Erath, Hood, Somervell 28 Fisher, Haskell, Jones, Kent, Mitchell, Nolan, Palo Pinto, Scurry, Shackelford, Stephens, Stonewall, Throckmort 29 Taylor 30 Coke, Tom Green 31 Borden, Concho, Crockett, Dawson, Glasscock, Howard, Irion, Kimble, Martin, Mason, McCulloch, Menard, Reagan, Runnels, Scheicher, Sterling, Sutton, Upton 32 Midland 33 Ector 34 Andrews, Brewster, Crane, Culberson, Gaines, Hudspeth, Jeff Davis, Loving, Pecos, Presidio, Reeves, Terell, Ward, Winkler 35 El Paso 36 Blanco, Brown, Burnet, Coleman, Hamilton, Lampasas, Llano, Mills, San Saba 37 Bell, Coryell 38 McLennan 39 Austin, Burleson, Grimes, Leon, Madison, Robertson, Washington 40 Brazos 41 Houston, Polk, San Jacinto, Trinity, Walker 42 Hardin, Orange 43 Jefferson 44 Chambers, Liberty, Montgomery, Waller 45 Harris 46 Fort Bend 47 Brazoria 48 Galveston 49 Colorado, Lavaca, Matagorda, Wharton 50 Bastrop, Caldwell, Fayette, Lee, Milam 51 Williamson 52 Hays, Travis 53 Comal, Guadalupe 54 Bexar 55 Atascosa, DeWitt, Goliad, Gonzales, Karnes, Wilson 56 Bandera, Frio, Gillespie, Kendall, Kerr, Medina 57 Dimmit, Edwards, Kinney, La Salle, Maverick, Real, Uvalde, Val Verde, Zavala 58 Webb 59 Aransas, Bee, Duval, Jim Wells, Live Oak, McMullen, Refugio 60 Calhoun, Jackson, Victoria 61 Nueces, San Patricio 62 Brooks, Jim Hogg, Kenedy, Kleberg, Starr, Willacy, Zapata 63 Hidalgo 64 Cameron 7 Help Is at Hand: New Health Insurance Tax Credits in Texas Table 5. Texans Eligible for Premium Tax Credits, Distribution by Income Level and County, 2014 County Name(s) County Name(s) 1 Armstrong, Briscoe, Carson, Castro, Childress, Collingsworth, Dallam, Deaf Smith, Donley, Gray, Hall, Hansford, Hartley, Hemphill, Hutchinson, Lipscomb, Moore, Ochiltree, Oldham, Parmer, Roberts, Sherman, Swisher, Wheeler 2 Potter 3 Randall 4 Bailey, Cochran, Crosby, Dickens, Floyd, Garza, Hale, Hockley, King, Lamb, Lynn, Motley, Terry, Yoakum 5 Lubbock 6 Archer, Baylor, Clay, Cottle, Foard, Hardeman, Jack, Knox, Montague, Wilbarger, Wise, Young 7 Wichita 8 Cooke, Grayson 9 Fannin, Hunt 10 Delta, Franklin, Hopkins, Lamar, Morris, Red River, Titus 11 Bowie, Cass 12 Camp, Marion, Rains, Upshur, Van Zandt, Wood 13 Gregg, Harrison 14 Smith 15 Cherokee, Panola, Rusk 16 Jasper, Newton, Sabine, San Augustine, Shelby, Tyler 17 Angelina, Nacogdoches 18 Anderson, Henderson 19 Falls, Freestone, Hill, Limestone, Navarro 20 Kaufman, Rockwall 21 Collin 22 Denton 23 Dallas 24 Ellis 25 Parker, Tarrant 26 Johnson 27 Bosque, Callahan, Comanche, Eastland, Erath, Hood, Somervell 28 Fisher, Haskell, Jones, Kent, Mitchell, Nolan, Palo Pinto, Scurry, Shackelford, Stephens, Stonewall, Throckmort 29 Taylor 30 Coke, Tom Green 31 Borden, Concho, Crockett, Dawson, Glasscock, Howard, Irion, Kimble, Martin, Mason, McCulloch, Menard, Reagan, Runnels, Scheicher, Sterling, Sutton, Upton 32 Midland 33 Ector Income as a Percent of Federal Poverty Level 0-199% Number Percent 200-399% Number Percent Total Number 9,030 49.2% 9,310 50.8% 18,340 6,870 4,310 6,120 49.0% 37.5% 50.6% 7,150 7,190 5,970 51.0% 62.5% 49.4% 14,020 11,510 12,090 11,260 7,860 43.9% 41.2% 14,410 11,210 56.1% 58.8% 25,670 19,070 4,670 8,010 5,330 9,240 44.1% 42.9% 42.8% 48.2% 5,930 10,660 7,120 9,950 56.0% 57.1% 57.2% 51.8% 10,600 18,670 12,450 19,190 6,190 9,700 8,590 10,750 6,370 5,500 46.4% 45.5% 42.4% 47.8% 43.5% 46.5% 7,140 11,640 11,650 11,760 8,270 6,340 53.6% 54.5% 57.6% 52.2% 56.5% 53.5% 13,330 21,340 20,240 22,510 14,640 11,840 6,970 5,620 6,890 7,230 24,560 23,020 147,500 6,130 84,360 9,220 7,050 50.7% 40.0% 45.5% 38.9% 40.5% 41.5% 50.5% 41.0% 44.1% 45.8% 45.7% 6,790 8,440 8,260 11,360 36,050 32,460 144,460 8,840 106,970 10,910 8,360 49.3% 60.0% 54.5% 61.1% 59.5% 58.5% 49.5% 59.1% 55.9% 54.2% 54.3% 13,760 14,060 15,150 18,590 60,610 55,470 291,960 14,970 191,330 20,130 15,400 4,590 38.5% 7,330 61.5% 11,920 5,220 6,420 4,330 44.2% 50.7% 40.2% 6,590 6,240 6,450 55.8% 49.3% 59.8% 11,810 12,660 10,790 6,140 6,590 41.7% 37.5% 8,600 11,000 58.4% 62.5% 14,750 17,590 (continued next page) 8 Help Is at Hand: New Health Insurance Tax Credits in Texas Table 5. Texans Eligible for Premium Tax Credits, Distribution by Income Level and County, 2014 (cont'd) County Name(s) 34 Andrews, Brewster, Crane, Culberson, Gaines, Hudspeth, Jeff Davis, Loving, Pecos, Presidio, Reeves, Terell, Ward, Winkler 35 El Paso 36 Blanco, Brown, Burnet, Coleman, Hamilton, Lampasas, Llano, Mills, San Saba 37 Bell, Coryell 38 McLennan 39 Austin, Burleson, Grimes, Leon, Madison, Robertson, Washington 40 Brazos 41 Houston, Polk, San Jacinto, Trinity, Walker 42 Hardin, Orange 43 Jefferson 44 Chambers, Liberty, Montgomery, Waller 45 Harris 46 Fort Bend 47 Brazoria 48 Galveston 49 Colorado, Lavaca, Matagorda, Wharton 50 Bastrop, Caldwell, Fayette, Lee, Milam 51 Williamson 52 Hays, Travis 53 Comal, Guadalupe 54 Bexar 55 Atascosa, DeWitt, Goliad, Gonzales, Karnes, Wilson 56 Bandera, Frio, Gillespie, Kendall, Kerr, Medina 57 Dimmit, Edwards, Kinney, La Salle, Maverick, Real, Uvalde, Val Verde, Zavala 58 Webb 59 Aransas, Bee, Duval, Jim Wells, Live Oak, McMullen, Refugio 60 Calhoun, Jackson, Victoria 61 Nueces, San Patricio 62 Brooks, Jim Hogg, Kenedy, Kleberg, Starr, Willacy, Zapata 63 Hidalgo 64 Cameron Total, all counties Income as a Percent of Federal Poverty Level 0-199% 200-399% Number Percent Number Percent Total Number 4,910 42.1% 6,760 57.9% 11,670 45,800 7,830 53.2% 48.4% 40,360 8,340 46.8% 51.6% 86,160 16,170 11,920 12,120 5,570 45.5% 50.7% 43.4% 14,310 11,780 7,270 54.5% 49.3% 56.6% 26,230 23,890 12,840 9,450 8,030 4,460 9,850 23,810 212,630 20,950 12,010 9,470 6,160 7,700 14,290 54,940 8,530 80,400 5,290 62.7% 52.6% 36.3% 46.1% 41.6% 47.6% 45.9% 39.9% 39.2% 48.6% 44.6% 39.7% 48.5% 39.8% 47.6% 42.3% 5,620 7,250 7,830 11,530 33,470 234,240 24,640 18,070 14,680 6,520 9,560 21,690 58,240 12,880 88,490 7,230 37.3% 47.4% 63.7% 53.9% 58.4% 52.4% 54.1% 60.1% 60.8% 51.4% 55.4% 60.3% 51.5% 60.2% 52.4% 57.7% 15,070 15,280 12,300 21,380 57,280 446,850 45,590 30,080 24,150 12,680 17,250 35,980 113,170 21,410 168,880 12,530 8,140 10,290 40.6% 48.5% 11,910 10,910 59.4% 51.5% 20,050 21,200 16,550 6,620 52.9% 43.5% 14,750 8,610 47.1% 56.5% 31,300 15,230 5,920 17,460 8,940 43.9% 44.3% 54.3% 7,560 21,990 7,520 56.1% 55.7% 45.7% 13,480 39,450 16,450 48,220 25,260 52.8% 52.6% 43,150 22,750 47.2% 47.4% 91,370 48,010 1,205,150 46.7% 1,374,710 53.3% 2,579,810 Notes: Estimates prepared by The Lewin Group for Families USA (methodology available upon request). Data are for those with incomes below 400 percent of the federal poverty level. Numbers may not add due to rounding. 9 Help Is at Hand: New Health Insurance Tax Credits in Texas Table 6. Texans Eligible for Premium Tax Credits, Distribution by Family Employment Status and County, 2014 County Name(s) 1 Armstrong, Briscoe, Carson, Castro, Childress, Collingsworth, Dallam, Deaf Smith, Donley, Gray, Hall, Hansford, Hartley, Hemphill, Hutchinson, Lipscomb, Moore, Ochiltree, Oldham, Parmer, Roberts, Sherman, Swisher, Wheeler 2 Potter 3 Randall 4 Bailey, Cochran, Crosby, Dickens, Floyd, Garza, Hale, Hockley, King, Lamb, Lynn, Motley, Terry, Yoakum 5 Lubbock 6 Archer, Baylor, Clay, Cottle, Foard, Hardeman, Jack, Knox, Montague, Wilbarger, Wise, Young 7 Wichita 8 Cooke, Grayson 9 Fannin, Hunt 10 Delta, Franklin, Hopkins, Lamar, Morris, Red River, Titus 11 Bowie, Cass 12 Camp, Marion, Rains, Upshur, Van Zandt, Wood 13 Gregg, Harrison 14 Smith 15 Cherokee, Panola, Rusk 16 Jasper, Newton, Sabine, San Augustine, Shelby, Tyler 17 Angelina, Nacogdoches 18 Anderson, Henderson 19 Falls, Freestone, Hill, Limestone, Navarro 20 Kaufman, Rockwall 21 Collin 22 Denton 23 Dallas 24 Ellis 25 Parker, Tarrant 26 Johnson 27 Bosque, Callahan, Comanche, Eastland, Erath, Hood, Somervell 28 Fisher, Haskell, Jones, Kent, Mitchell, Nolan, Palo Pinto, Scurry, Shackelford, Stephens, Stonewall, Throckmort 29 Taylor 30 Coke, Tom Green 31 Borden, Concho, Crockett, Dawson, Glasscock, Howard, Irion, Kimble, Martin, Mason, McCulloch, Menard, Reagan, Runnels, Scheicher, Sterling, Sutton, Upton 32 Midland 33 Ector Employed* Not Employed* Number Percent Number Percent Total Number 16,340 89.1% 2,000 10.9% 18,340 12,640 10,450 10,590 90.1% 90.8% 87.6% 1,390 1,060 1,500 9.9% 9.2% 12.4% 14,020 11,510 12,090 23,120 17,060 90.1% 89.5% 2,550 2,010 9.9% 10.5% 25,670 19,070 9,360 16,690 11,080 17,020 88.2% 89.4% 89.0% 88.7% 1,250 1,980 1,370 2,170 11.8% 10.6% 11.0% 11.3% 10,600 18,670 12,450 19,190 12,040 18,880 90.3% 88.5% 1,300 2,460 9.7% 11.5% 13,330 21,340 18,020 20,120 12,980 10,470 89.0% 89.4% 88.7% 88.4% 2,220 2,390 1,660 1,370 11.0% 10.6% 11.3% 11.6% 20,240 22,510 14,640 11,840 12,200 12,430 13,540 16,570 53,030 49,450 256,430 13,540 169,320 18,120 13,640 88.6% 88.4% 89.4% 89.1% 87.5% 89.2% 87.8% 90.5% 88.5% 90.0% 88.5% 1,570 1,630 1,610 2,020 7,590 6,020 35,530 1,420 22,010 2,010 1,770 11.4% 11.6% 10.6% 10.9% 12.5% 10.8% 12.2% 9.5% 11.5% 10.0% 11.5% 13,760 14,060 15,150 18,590 60,610 55,470 291,960 14,970 191,330 20,130 15,400 10,750 90.2% 1,170 9.8% 11,920 10,520 11,290 13,380 89.1% 89.2% 90.7% 1,280 1,370 1,370 10.9% 10.8% 9.3% 11,810 12,660 14,750 9,580 88.8% 1,200 11.2% 10,790 15,910 90.5% 1,680 9.5% 17,590 (continued next page) 10 Help Is at Hand: New Health Insurance Tax Credits in Texas Table 6. Texans Eligible for Premium Tax Credits, Distribution by Family Employment Status and County, 2014 (cont'd) County Name(s) 34 Andrews, Brewster, Crane, Culberson, Gaines, Hudspeth, Jeff Davis, Loving, Pecos, Presidio, Reeves, Terell, Ward, Winkler 35 El Paso 36 Blanco, Brown, Burnet, Coleman, Hamilton, Lampasas, Llano, Mills, San Saba 37 Bell, Coryell 38 McLennan 39 Austin, Burleson, Grimes, Leon, Madison, Robertson, Washington 40 Brazos 41 Houston, Polk, San Jacinto, Trinity, Walker 42 Hardin, Orange 43 Jefferson 44 Chambers, Liberty, Montgomery, Waller 45 Harris 46 Fort Bend 47 Brazoria 48 Galveston 49 Colorado, Lavaca, Matagorda, Wharton 50 Bastrop, Caldwell, Fayette, Lee, Milam 51 Williamson 52 Hays, Travis 53 Comal, Guadalupe 54 Bexar 55 Atascosa, DeWitt, Goliad, Gonzales, Karnes, Wilson 56 Bandera, Frio, Gillespie, Kendall, Kerr, Medina 57 Dimmit, Edwards, Kinney, La Salle, Maverick, Real, Uvalde, Val Verde, Zavala 58 Webb 59 Aransas, Bee, Duval, Jim Wells, Live Oak, McMullen, Refugio 60 Calhoun, Jackson, Victoria 61 Nueces, San Patricio 62 Brooks, Jim Hogg, Kenedy, Kleberg, Starr, Willacy, Zapata 63 Hidalgo 64 Cameron Total, all counties Employed* Number Percent Not Employed* Number Percent Total Number 10,420 89.3% 1,250 10.7% 11,670 74,730 14,170 86.7% 87.6% 11,440 2,010 13.3% 12.4% 86,160 16,170 22,620 21,200 11,320 86.2% 88.7% 88.1% 3,610 2,700 1,530 13.8% 11.3% 11.9% 26,230 23,890 12,840 12,580 13,430 10,880 18,840 50,740 391,970 38,850 26,750 21,340 11,210 15,290 32,210 99,450 18,950 149,340 11,230 83.5% 87.9% 88.5% 88.1% 88.6% 87.7% 85.2% 88.9% 88.4% 88.4% 88.6% 89.5% 87.9% 88.5% 88.4% 89.7% 2,490 1,850 1,420 2,540 6,540 54,880 6,740 3,330 2,810 1,470 1,960 3,780 13,730 2,460 19,550 1,300 16.5% 12.1% 11.6% 11.9% 11.4% 12.3% 14.8% 11.1% 11.6% 11.6% 11.4% 10.5% 12.1% 11.5% 11.6% 10.3% 15,070 15,280 12,300 21,380 57,280 446,850 45,590 30,080 24,150 12,680 17,250 35,980 113,170 21,410 168,880 12,530 17,790 18,770 88.7% 88.5% 2,260 2,430 11.3% 11.5% 20,050 21,200 27,440 13,730 87.7% 90.2% 3,860 1,500 12.3% 9.9% 31,300 15,230 12,150 34,910 14,190 90.1% 88.5% 86.2% 1,340 4,530 2,270 9.9% 11.5% 13.8% 13,480 39,450 16,450 78,430 41,070 85.8% 85.5% 12,930 6,950 14.2% 14.5% 91,370 48,010 2,272,510 88.1% 307,320 11.9% 2,579,810 Notes: Estimates prepared by The Lewin Group for Families USA (methodology available upon request). Data are for those with incomes below 400 percent of the federal poverty level. Numbers may not add due to rounding. * The category "employed" includes those employed both full- and part-time. "Not employed" includes those out of the workforce and those not looking for work. 11 Help Is at Hand: New Health Insurance Tax Credits in Texas Table 7. Texans Eligible for Premium Tax Credits, Distribution by Age and County, 2014 County Name(s) 1 Armstrong, Briscoe, Carson, Castro, Childress, Collingsworth, Dallam, Deaf Smith, Donley, Gray, Hall, Hansford, Hartley, Hemphill, Hutchinson, Lipscomb, Moore, Ochiltree, Oldham, Parmer, Roberts, Sherman, Swisher, Wheeler 2 Potter 3 Randall 4 Bailey, Cochran, Crosby, Dickens, Floyd, Garza, Hale, Hockley, King, Lamb, Lynn, Motley, Terry, Yoakum 5 Lubbock 6 Archer, Baylor, Clay, Cottle, Foard, Hardeman, Jack, Knox, Montague, Wilbarger, Wise, Young 7 Wichita 8 Cooke, Grayson 9 Fannin, Hunt 10 Delta, Franklin, Hopkins, Lamar, Morris, Red River, Titus 11 Bowie, Cass 12 Camp, Marion, Rains, Upshur, Van Zandt, Wood 13 Gregg, Harrison 14 Smith 15 Cherokee, Panola, Rusk 16 Jasper, Newton, Sabine, San Augustine, Shelby, Tyler 17 Angelina, Nacogdoches 18 Anderson, Henderson 19 Falls, Freestone, Hill, Limestone, Navarro 20 Kaufman, Rockwall 21 Collin 22 Denton 23 Dallas 24 Ellis 25 Parker, Tarrant 26 Johnson 27 Bosque, Callahan, Comanche, Eastland, Erath, Hood, Somervell 28 Fisher, Haskell, Jones, Kent, Mitchell, Nolan, Palo Pinto, Scurry, Shackelford, Stephens, Stonewall, Throckmort 29 Taylor 30 Coke, Tom Green 31 Borden, Concho, Crockett, Dawson, Glasscock, Howard, Irion, Kimble, Martin, Mason, McCulloch, Menard, Reagan, Runnels, Scheicher, Sterling, Sutton, Upton Under 18 Age 18-34 Age 35-54 Age 55+ Total Number Percent Number Percent Number Percent Number Percent Number 5,190 28.3% 5,570 30.4% 5,430 29.6% 2,150 11.7% 18,340 3,670 2,830 3,070 26.2% 24.6% 25.4% 5,030 4,080 3,860 35.9% 35.5% 31.9% 4,000 3,190 3,430 28.6% 27.7% 28.4% 1,320 1,410 1,720 9.4% 12.3% 14.3% 14,020 11,510 12,090 6,110 4,720 23.8% 24.8% 10,760 6,020 41.9% 31.6% 6,400 6,030 24.9% 31.6% 2,400 2,290 9.4% 12.0% 25,670 19,070 2,720 4,940 3,240 4,990 25.6% 26.5% 26.0% 26.0% 3,840 6,090 4,170 6,300 36.2% 32.6% 33.5% 32.8% 2,930 5,390 3,600 5,490 27.6% 28.9% 28.9% 28.6% 1,130 2,250 1,440 2,410 10.6% 12.1% 11.5% 12.6% 10,600 18,670 12,450 19,190 3,440 5,640 25.8% 26.4% 4,880 6,700 36.6% 31.4% 3,710 6,400 27.8% 30.0% 1,310 2,600 9.8% 12.2% 13,330 21,340 5,180 5,630 3,960 3,030 25.6% 25.0% 27.1% 25.6% 6,930 8,260 4,550 3,570 34.2% 36.7% 31.1% 30.2% 5,760 6,190 4,270 3,640 28.5% 27.5% 29.1% 30.7% 2,370 2,430 1,860 1,600 11.7% 10.8% 12.7% 13.5% 20,240 22,510 14,640 11,840 3,660 3,600 3,530 26.6% 25.6% 23.3% 5,000 4,610 5,230 36.3% 32.8% 34.5% 3,610 3,990 4,470 26.2% 28.4% 29.5% 1,500 1,860 1,930 10.9% 13.2% 12.7% 13,760 14,060 15,150 5,590 15,830 14,420 69,000 4,010 49,510 5,420 4,330 30.1% 26.1% 26.0% 23.6% 26.8% 25.9% 26.9% 28.1% 6,140 21,790 21,210 99,770 5,710 67,790 7,100 5,020 33.0% 35.9% 38.2% 34.2% 38.1% 35.4% 35.3% 32.6% 5,030 16,460 14,840 93,000 3,910 53,930 5,750 4,180 27.1% 27.2% 26.7% 31.9% 26.1% 28.2% 28.6% 27.1% 1,830 6,540 5,010 30,180 1,350 20,110 1,850 1,890 9.8% 10.8% 9.0% 10.3% 9.0% 10.5% 9.2% 12.3% 18,590 60,610 55,470 291,960 14,970 191,330 20,130 15,400 2,670 22.4% 3,830 32.1% 3,730 31.3% 1,700 14.3% 11,920 3,090 3,090 2,390 26.2% 24.4% 22.1% 4,470 4,680 3,070 37.8% 37.0% 28.5% 3,030 3,460 3,630 25.7% 27.4% 33.7% 1,220 1,430 1,700 10.3% 11.3% 15.7% 11,810 12,660 10,790 (continued next page) 12 Help Is at Hand: New Health Insurance Tax Credits in Texas Table 7. Texans Eligible for Premium Tax Credits, Distribution by Age and County, 2014 (cont'd) County Name(s) 32 Midland 33 Ector 34 Andrews, Brewster, Crane, Culberson, Gaines, Hudspeth, Jeff Davis, Loving, Pecos, Presidio, Reeves, Terell, Ward, Winkler 35 El Paso 36 Blanco, Brown, Burnet, Coleman, Hamilton, Lampasas, Llano, Mills, San Saba 37 Bell, Coryell 38 McLennan 39 Austin, Burleson, Grimes, Leon, Madison, Robertson, Washington 40 Brazos 41 Houston, Polk, San Jacinto, Trinity, Walker 42 Hardin, Orange 43 Jefferson 44 Chambers, Liberty, Montgomery, Waller 45 Harris 46 Fort Bend 47 Brazoria 48 Galveston 49 Colorado, Lavaca, Matagorda, Wharton 50 Bastrop, Caldwell, Fayette, Lee, Milam 51 Williamson 52 Hays, Travis 53 Comal, Guadalupe 54 Bexar 55 Atascosa, DeWitt, Goliad, Gonzales, Karnes, Wilson 56 Bandera, Frio, Gillespie, Kendall, Kerr, Medina 57 Dimmit, Edwards, Kinney, La Salle, Maverick, Real, Uvalde, Val Verde, Zavala 58 Webb 59 Aransas, Bee, Duval, Jim Wells, Live Oak, McMullen, Refugio 60 Calhoun, Jackson, Victoria 61 Nueces, San Patricio 62 Brooks, Jim Hogg, Kenedy, Kleberg, Starr, Willacy, Zapata 63 Hidalgo 64 Cameron Total, all counties Under 18 Age 18-34 Age 35-54 Age 55+ Total Number Percent Number Percent Number Percent Number Percent Number 3,750 4,820 2,680 25.4% 27.4% 22.9% 5,480 6,330 3,930 37.2% 36.0% 33.7% 4,020 4,840 3,700 27.2% 27.5% 31.7% 1,500 1,590 1,360 10.2% 9.1% 11.6% 14,750 17,590 11,670 21,510 3,940 25.0% 24.4% 30,390 4,550 35.3% 28.1% 25,410 4,930 29.5% 30.5% 8,860 2,750 10.3% 17.0% 86,160 16,170 7,090 5,920 3,490 27.0% 24.8% 27.2% 10,440 9,070 4,200 39.8% 38.0% 32.7% 7,000 6,190 3,360 26.7% 25.9% 26.2% 1,710 2,720 1,790 6.5% 11.4% 13.9% 26,230 23,890 12,840 2,980 3,470 19.8% 22.7% 8,450 5,640 56.1% 36.9% 2,440 4,270 16.2% 27.9% 1,200 1,910 8.0% 12.5% 15,070 15,280 3,250 5,170 15,220 26.5% 24.2% 26.6% 4,090 7,420 20,190 33.2% 34.7% 35.2% 3,440 6,070 15,730 28.0% 28.4% 27.5% 1,520 2,720 6,150 12.3% 12.7% 10.7% 12,300 21,380 57,280 107,890 11,320 8,210 6,010 3,130 24.1% 24.8% 27.3% 24.9% 24.7% 156,090 16,450 10,760 8,260 4,290 34.9% 36.1% 35.8% 34.2% 33.8% 135,250 12,390 8,100 6,970 3,620 30.3% 27.2% 26.9% 28.9% 28.6% 47,640 5,430 3,020 2,910 1,640 10.7% 11.9% 10.0% 12.1% 12.9% 446,850 45,590 30,080 24,150 12,680 4,640 26.9% 5,360 31.1% 5,170 30.0% 2,090 12.1% 17,250 9,360 24,850 5,290 41,570 3,000 26.0% 22.0% 24.7% 24.6% 24.0% 13,040 46,060 7,540 62,220 4,360 36.2% 40.7% 35.2% 36.8% 34.8% 10,000 32,110 6,350 48,790 3,690 27.8% 28.4% 29.7% 28.9% 29.5% 3,580 10,160 2,240 16,310 1,480 9.9% 9.0% 10.4% 9.7% 11.8% 35,980 113,170 21,410 168,880 12,530 4,480 22.3% 6,440 32.1% 6,430 32.1% 2,700 13.5% 20,050 5,690 26.8% 6,930 32.7% 6,290 29.7% 2,290 10.8% 21,200 9,130 3,520 29.2% 23.1% 10,960 5,270 35.0% 34.6% 8,240 4,750 26.3% 31.2% 2,960 1,690 9.5% 11.1% 31,300 15,230 3,290 9,420 4,230 24.4% 23.9% 25.7% 4,450 14,070 5,950 33.0% 35.7% 36.2% 4,090 11,500 4,850 30.3% 29.2% 29.5% 1,660 4,450 1,420 12.3% 11.3% 8.6% 13,480 39,450 16,450 23,560 12,630 25.8% 26.3% 32,880 16,540 36.0% 34.5% 26,750 13,820 29.3% 28.8% 8,170 5,030 8.9% 10.5% 91,370 48,010 642,960 24.9% 914,110 35.4% 749,440 29.1% 273,370 10.6% 2,579,810 Notes: Estimates prepared by The Lewin Group for Families USA (methodology available upon request). Data are for those with incomes below 400 percent of the federal poverty level. Numbers may not add due to rounding. 13 Help Is at Hand: New Health Insurance Tax Credits in Texas Table 8. Texans Eligible for Premium Tax Credits, Distribution by Race/Ethnicity and County, 2014 County Name(s) 1 Armstrong, Briscoe, Carson, Castro, Childress, Collingsworth, Dallam, Deaf Smith, Donley, Gray, Hall, Hansford, Hartley, Hemphill, Hutchinson, Lipscomb, Moore, Ochiltree, Oldham, Parmer, Roberts, Sherman, Swisher, Wheeler 2 Potter 3 Randall 4 Bailey, Cochran, Crosby, Dickens, Floyd, Garza, Hale, Hockley, King, Lamb, Lynn, Motley, Terry, Yoakum 5 Lubbock 6 Archer, Baylor, Clay, Cottle, Foard, Hardeman, Jack, Knox, Montague, Wilbarger, Wise, Young 7 Wichita 8 Cooke, Grayson 9 Fannin, Hunt 10 Delta, Franklin, Hopkins, Lamar, Morris, Red River, Titus 11 Bowie, Cass 12 Camp, Marion, Rains, Upshur, Van Zandt, Wood 13 Gregg, Harrison 14 Smith 15 Cherokee, Panola, Rusk 16 Jasper, Newton, Sabine, San Augustine, Shelby, Tyler 17 Angelina, Nacogdoches 18 Anderson, Henderson 19 Falls, Freestone, Hill, Limestone, Navarro 20 Kaufman, Rockwall 21 Collin 22 Denton 23 Dallas 24 Ellis 25 Parker, Tarrant 26 Johnson 27 Bosque, Callahan, Comanche, Eastland, Erath, Hood, Somervell 28 Fisher, Haskell, Jones, Kent, Mitchell, Nolan, Palo Pinto, Scurry, Shackelford, Stephens, Stonewall, Throckmort 29 Taylor 30 Coke, Tom Green 31 Borden, Concho, Crockett, Dawson, Glasscock, Howard, Irion, Kimble, Martin, Mason, McCulloch, Menard, Reagan, Runnels, Scheicher, Sterling, Sutton, Upton White, Non-Hispanic Black, Non-Hispanic Hispanic Other* Total Number Percent Number Percent Number Percent Number Percent Number 8,470 46.2% 350 1.9% 9,060 49.4% 2.5% 18,340 6,310 45.0% 8,370 72.7% 4,690 38.8% 1,180 8.4% 250 2.2% 270 2.2% 12,730 49.6% 14,360 75.3% 1,370 5.3% 370 1.9% 6,740 13,730 8,770 12,350 63.6% 73.5% 70.4% 64.4% 990 9.3% 980 5.3% 840 6.8% 2,010 10.5% 2,340 22.0% 3,130 16.8% 2,310 18.6% 4,060 21.2% 540 820 530 770 5.1% 4.4% 4.2% 4.0% 10,600 18,670 12,450 19,190 9,100 16,680 68.3% 78.2% 2,840 1,650 21.3% 7.7% 910 2,090 490 920 3.6% 4.3% 13,330 21,340 11,780 12,450 9,310 8,740 58.2% 55.3% 63.6% 73.9% 4,060 3,640 2,300 1,820 20.1% 16.2% 15.7% 15.4% 3,940 5,800 2,670 1,030 19.5% 25.8% 18.3% 8.7% 460 610 350 250 2.3% 2.7% 2.4% 2.1% 20,240 22,510 14,640 11,840 60.9% 71.0% 58.2% 1,460 1,650 1,740 10.6% 11.8% 11.5% 3,240 2,120 4,400 23.5% 15.1% 29.1% 680 300 190 4.9% 2.1% 1.3% 13,760 14,060 15,150 8,390 9,990 8,820 10,950 31,640 30,570 73,640 8,090 85,980 13,720 11,990 7,950 58.9% 52.2% 55.1% 25.2% 54.0% 44.9% 68.2% 77.8% 66.7% 7,240 61.3% 6,330 50.0% 5,120 47.5% 1,640 8.8% 5,160 8.5% 4,710 8.5% 48,380 16.6% 1,360 9.1% 21,790 11.4% 420 2.1% 130 0.8% 5,940 42.4% 2,310 20.1% 6,930 57.3% 470 590 4.2% 580 5.0% 190 1.6% 14,020 11,510 12,090 10,440 40.7% 1,120 4.4% 3,870 20.3% 480 2.5% 25,670 19,070 5,280 15,240 15,220 149,880 5,250 69,410 5,120 2,690 6.8% 9.8% 28.4% 25.1% 27.4% 51.3% 35.1% 36.3% 25.4% 17.4% 470 4.0% 3,220 27.0% 700 350 260 5.9% 2.7% 2.4% 3,470 29.4% 5,700 45.0% 5,180 48.0% 730 3.9% 8,570 14.1% 4,970 9.0% 20,050 6.9% 270 1.8% 14,160 7.4% 870 4.3% 600 3.9% 280 2.4% 390 3.3% 280 2.2% 230 2.2% 18,590 60,610 55,470 291,960 14,970 191,330 20,130 15,400 11,920 11,810 12,660 10,790 (continued next page) 14 Help Is at Hand: New Health Insurance Tax Credits in Texas Table 8. Texans Eligible for Premium Tax Credits, Distribution by Race/Ethnicity and County, 2014 (cont'd) County Name(s) White, Non-Hispanic Black, Non-Hispanic Hispanic Other* Total Number Percent Number Percent Number Percent Number Percent Number 32 Midland 5,520 37.5% 33 Ector 5,270 30.0% 34 Andrews, Brewster, Crane, 2,970 25.5% Culberson, Gaines, Hudspeth, Jeff Davis, Loving, Pecos, Presidio, Reeves, Terell, Ward, Winkler 35 El Paso 6,880 8.0% 36 Blanco, Brown, Burnet, Coleman, 11,910 73.7% Hamilton, Lampasas, Llano, Mills, San Saba 37 Bell, Coryell 12,870 49.1% 38 McLennan 13,130 54.9% 39 Austin, Burleson, Grimes, Leon, 7,820 60.9% Madison, Robertson, Washington 40 Brazos 9,410 62.5% 41 Houston, Polk, San Jacinto, Trinity, 10,090 66.0% Walker 42 Hardin, Orange 10,210 83.0% 43 Jefferson 8,590 40.2% 44 Chambers, Liberty, Montgomery, 34,550 60.3% Waller 45 Harris 113,210 25.3% 46 Fort Bend 12,120 26.6% 47 Brazoria 12,620 42.0% 48 Galveston 11,400 47.2% 49 Colorado, Lavaca, Matagorda, 5,230 41.2% Wharton 50 Bastrop, Caldwell, Fayette, Lee, 9,320 54.0% Milam 51 Williamson 19,480 54.1% 52 Hays, Travis 44,730 39.5% 53 Comal, Guadalupe 9,840 46.0% 54 Bexar 34,410 20.4% 55 Atascosa, DeWitt, Goliad, Gonzales, 4,800 38.3% Karnes, Wilson 56 Bandera, Frio, Gillespie, Kendall, 10,980 54.8% Kerr, Medina 57 Dimmit, Edwards, Kinney, La Salle, 2,650 12.5% Maverick, Real, Uvalde, Val Verde, Zavala 58 Webb 830 2.7% 59 Aransas, Bee, Duval, Jim Wells, 3,660 24.0% Live Oak, McMullen, Refugio 60 Calhoun, Jackson, Victoria 5,330 39.5% 61 Nueces, San Patricio 9,730 24.7% 62 Brooks, Jim Hogg, Kenedy, Kleberg, 960 5.8% Starr, Willacy, Zapata 63 Hidalgo 4,830 5.3% 64 Cameron 3,590 7.5% Total, all counties 943,920 36.6% 980 580 110 1,530 340 6.6% 3.3% 0.9% 8,110 55.0% 11,410 64.9% 8,160 69.9% 1.8% 2.1% 76,350 3,700 88.6% 22.8% 140 0.9% 330 1.9% 430 3.7% 1,410 220 1.6% 1.4% 14,750 17,590 11,670 86,160 16,170 3,980 15.2% 2,730 11.4% 1,640 12.8% 7,880 30.0% 6,990 29.2% 2,960 23.0% 1,510 5.7% 1,050 4.4% 430 3.3% 26,230 23,890 12,840 1,180 7.9% 1,930 12.6% 3,470 23.0% 2,660 17.4% 1,000 6.6% 600 3.9% 15,070 15,280 800 6.5% 220 1.8% 4,710 22.0% 1,110 5.2% 16,740 29.2% 2,580 4.5% 12,300 21,380 57,280 1,070 8.7% 6,970 32.6% 3,410 6.0% 67,690 8,810 2,690 3,050 1,270 15.1% 19.3% 8.9% 12.6% 10.0% 233,820 16,710 12,660 8,240 5,720 950 5.5% 6,610 2,080 7,330 690 7,910 240 5.8% 6.5% 3.2% 4.7% 1.9% 11,810 52,720 10,330 120,240 7,380 52.3% 32,140 7.2% 36.7% 7,950 17.4% 42.1% 2,110 7.0% 34.1% 1,460 6.0% 45.1% 470 3.7% 38.3% 390 2.2% 32.8% 2,620 7.3% 46.6% 8,390 7.4% 48.3% 550 2.6% 71.2% 6,320 3.7% 58.9% 110 0.9% 446,850 45,590 30,080 24,150 12,680 17,250 35,980 113,170 21,410 168,880 12,530 130 0.6% 8,440 42.1% 500 2.5% 20,050 100 0.5% 18,080 85.3% 370 1.7% 21,200 10 130 0.0% 0.9% 30,150 96.3% 11,180 73.4% 310 1.0% 260 1.7% 31,300 15,230 5.0% 2.6% 0.5% 7,330 27,920 15,220 150 760 200 13,480 39,450 16,450 0.1% 0.0% 85,260 93.3% 43,690 91.0% 680 1,040 80 100 10 246,550 9.6% 1,249,680 54.4% 70.8% 92.5% 1.1% 1.9% 1.2% 1,180 1.3% 720 1.5% 48.4% 139,710 91,370 48,010 5.4% 2,579,810 Notes: Estimates prepared by The Lewin Group for Families USA (methodology available upon request). Data are for those with incomes below 400 percent of the federal poverty level. Numbers may not add due to rounding. * The category "other" includes those who identify themselves as American Indian, Aleut or Eskimo, Asian or Pacific Islander, or a member of more than one group. Help Is at Hand: New Health Insurance Tax Credits in Texas Discussion With the passage of the Affordable Care Act comes the promise of affordable health coverage for millions of Americans. In 2010-2011, more than 6.1 million Texans were uninsured.2 The new premium tax credits, which are entirely financed by the federal government, will provide much-needed relief to hundreds of thousands of low- to moderate-income uninsured and underinsured Texans. This relief will ensure that they will be better able to purchase affordable private health insurance through the new health insurance marketplaces (see "The New Health Insurance Marketplaces" on page 18). Starting in October of this year, individuals and families can begin enrolling in the insurance marketplaces, and they will benefit from this tax relief when the new coverage begins in January 2014. Nearly 2.6 million Texans will be eligible for premium tax credits in the first year that the state marketplace is operational. The size of the credit that individuals and families will be eligible to receive will depend on their income, and the lower a person's income, the larger his or her tax credit will be. This will ensure that the assistance goes to those who need it the most. Eligibility for Tax Credits Generally, the tax credits will be available to uninsured individuals and families who have incomes between 138 and 400 percent of poverty (between $15,860 and $45,960 for an individual, and between $32,500 and $94,200 for a family of four in 2013). Some people with incomes below 138 percent of poverty who do not qualify for Medicaid (mainly immigrants who are legal residents but who have been in the United States for fewer than five years) will be eligible for tax credits as well. Workers who would have to pay more than 9.5 percent of their wages to participate in their employer's plan, and workers whose employer plan pays less than 60 percent of the cost of covered benefits, will also be eligible for the tax credits to help purchase coverage in the state marketplaces. What Will Happen When a Family Receives a Tax Credit? When a person or family qualifies for a tax credit, the dollars from the credit will flow directly to the health plan in which the individual or family enrolls, offsetting the total cost of the family's health insurance premiums for that plan. The tax credits will be fully advanceable. This means that the tax credit will be available to pay the premium at the time the person enrolls in a plan. Thus, families will not need to wait until their taxes have been filed and processed in order to receive the credit and enroll in coverage, nor will they need to pay the full premium at the time of enrollment and then wait to be reimbursed. 15 16 Help Is at Hand: New Health Insurance Tax Credits in Texas Finally, the tax credit will be refundable, which means that families with very low incomes who do not owe taxes will be eligible for these tax credits to assist with the cost of premiums. However, the majority of these very low-income families will be eligible for Medicaid, and hence, ineligible for premium tax credits. How Much Will the Tax Credits Be Worth? As described earlier, the size of the tax credit that an individual or family will be eligible for will depend on the individual's or family's income. And how much coverage that credit will help buy will depend on the plan that the individual or family chooses. The new state marketplaces will offer a range of plans with four different coverage levels (from lowest to highest coverage level): bronze, silver, gold, and platinum. The calculations of the size of the tax credits will be linked to the second lowest-cost silver plan, also known as the "silver reference plan." Below, we describe how income and plan choice come together to determine what an individual or family will have to pay out of pocket. ?? To determine the size of an individual's or family's tax credit, start with their income. The family's household income will be used to determine the maximum premium contribution the family must pay for a particular "reference plan," described below. This maximum amount--a maximum percentage of family income--will be based on a sliding scale, and those with the lowest incomes will pay the smallest proportion of their incomes on premiums. ?? Next, identify the premiums for the second lowest-cost silver plan that is available to the individual or family in the area in which they live. The tax credit amount will be set so that the individual or family will not have to spend more than a specific percentage of their income on premiums for this plan. For example, a family of four with an income of $47,100 a year would not have to pay more than 6.3 percent of their income toward premiums for a silver plan and would get a tax credit of $9,530 (see Table 10). Therefore, they would not have to pay more than $247 a month for the silver reference plan that covers their entire family. ?? An individual or family will be free to pick any plan that is available through an exchange. However, the individual's or family's tax credit amount will be based on the premium for the silver reference plan. If a consumer selects a more expensive plan, he or she will pay the difference in price between this more expensive plan and the silver reference plan out of pocket. If a consumer selects a cheaper plan, he or she will still receive the tax credit amount based on the silver reference plan and thus will spend less out of pocket on the premiums for this cheaper plan. ?? In addition to premium assistance, some families will be eligible for more help with copayments, deductibles, and other cost-sharing. However, this help is available only for those who choose a silver plan (see "Additional Help with Out-ofPocket Health Care Costs" on page 19). Help Is at Hand: New Health Insurance Tax Credits in Texas Table 9. Examples of Premium Tax Credits for an Individual Income Income as a Annual Percent of Income Poverty Premium Contribution as a Percent of Income Example of Premium Tax Credit 138% $15,860 3.3% $4,480 150% $17,235 4.0% $4,310 200% $22,980 6.3% $3,550 250% $28,725 8.1% $2,690 300% $34,470 9.5% $1,730 400% $45,960 9.5% $630 Note: Based on an individual with premiums of $5,000 and 2013 federal poverty levels. Table 10. Examples of Premium Tax Credits for a Family of Four Income Income as a Annual Percent of Income Poverty Premium Contribution as a Percent of Income Example of Premium Tax Credit 138% $32,500 3.3% $11,430 150% $35,325 4.0% $11,090 200% $47,100 6.3% $9,530 250% $58,875 8.1% $7,760 300% $70,650 9.5% $5,790 400% $94,200 9.5% $3,550 Note: Based on a family of four with premiums of $12,500 and 2013 federal poverty levels. 17 18 Help Is at Hand: New Health Insurance Tax Credits in Texas The New Health Insurance Marketplaces The Affordable Care Act requires every state to have a new regulated insurance marketplace, or exchange, where consumers and small businesses can purchase health insurance plans and apply for help with the cost of coverage. While every state must have a new marketplace, states are taking different approaches to getting the job done. Some states are setting up their own marketplaces, other states are partnering with the federal government to take on specific tasks and functions, and in some states, the federal government will establish the new marketplaces. Regardless of the approach, every marketplace will provide important new consumer protections. When shopping in the new marketplaces, consumers and small businesses will know what they are getting for their money. All plans sold in the marketplaces must meet certain consumer protection and quality standards so that shoppers do not end up with surprising holes in their coverage. The new marketplaces will, among other things, certify that plans meet minimum requirements, such as having sufficient provider networks, implementing userfriendly quality reporting, and using marketing materials that are fair and accurate. Insurance companies will have to clearly explain what care is covered in every plan and at what cost. This information must be presented in a standardized, consumer-friendly format. This transparency will help people shop for the best plan for the price, and it will promote competition among plans. Under the Affordable Care Act, insurers that sell plans in the new marketplaces-- just like plans that are sold outside the exchanges--will not be allowed to deny coverage to people with pre-existing conditions or to charge exorbitant premiums, which will keep costs down for individuals and businesses. The new marketplaces will be a onestop shop where consumers can enroll in health coverage. These new marketplaces will help consumers apply for the new premium tax credits, and they will calculate the amount of the tax credit that consumers will receive. The marketplaces will also help lower-income consumers apply for Medicaid, the Children's Health Insurance Program (CHIP), and other public programs. All marketplaces will use one standardized application that is designed to help consumers find out which coverage and financial assistance options they are eligible for. They will also be required to have consumer-friendly websites, as well as toll-free telephone help lines. Perhaps most importantly, every marketplace will have a network of people who are trained and certified to conduct public education and outreach, and to provide in-person assistance with the application process for premium tax credits, Medicaid, and CHIP. These assisters will also help shoppers select the insurance option that best meets their needs. Help Is at Hand: New Health Insurance Tax Credits in Texas Comprehensive Coverage under the Affordable Care Act Under the Affordable Care Act, health insurance plans must meet a set of minimum requirements to ensure that consumers are getting the coverage they need. All plans that are sold directly to individuals and small businesses must cover a package of "essential health benefits." The general categories of required services in this package include outpatient care, emergency care, hospitalization, prescription drugs, maternity and newborn care, mental health and substance abuse treatment, rehabilitative and habilitative care, laboratory services, preventive and wellness services, chronic disease management, and pediatric services (including dental and vision care). Together, the premium tax credits and these essential health benefit requirements will ensure that those who buy insurance in the new marketplaces will be getting affordable, comprehensive coverage. Additional Help with Out-of-Pocket Health Care Costs The Affordable Care Act has a number of provisions that are meant to protect individuals and families from high out-of-pocket spending. Annual and lifetime dollar caps on covered benefits will no longer be permitted. This means that consumers who pay for health coverage won't run out of coverage if they develop health problems that are costly to treat. The Affordable Care Act also established caps on the amount an individual or family has to spend on out-of-pocket costs (i.e., deductibles, copayments, and co-insurance) for health services that are part of the essential benefits packages. Furthermore, additional cost-sharing assistance will be available to individuals and families with incomes up to 250 percent of poverty (about $28,725 for an individual or $58,875 for a family of four in 2013). This cost-sharing assistance will increase the proportion of health care costs that an individual or family's plan pays for. It will be available to people who purchase silver plans in the new health insurance marketplaces. Conclusion Health reform will provide significant help to nearly 2.6 million Texans who will become eligible for premium tax credits in 2014. This assistance, along with several important new consumer protections, will allow individuals and families to purchase affordable health coverage even if they have pre-existing conditions, and even if they change jobs or experience a drop in income. This, in turn, means added economic security for Texas's working families. As we draw closer to October 2013, when open enrollment begins, it is critical that states and the federal government work closely together to educate the public about how the new tax credits will work and to make it as simple as possible to connect people to this significant new source of help with the cost of health insurance. 19 20 Help Is at Hand: New Health Insurance Tax Credits in Texas Assumptions about the Population Eligible for Premium Tax Credits The premium tax credits are available only to uninsured people with family incomes at or above 100 percent of the federal poverty level. This is because those who crafted the health care law assumed that uninsured people with incomes below 100 percent of poverty would be enrolled in Medicaid. Medicaid provides out-of-pocket spending protections and additional benefits that are important for coverage to be meaningful for people with such low incomes. If Texas does not expand its Medicaid program, most uninsured people with family incomes below 100 percent of poverty will be left without any financial help or affordable insurance options. States that refuse to expand Medicaid, despite the generous federal support offered, will be condemning their most vulnerable residents to remain in the ranks of the uninsured. For our analysis, we assumed that Texas will take advantage of the opportunity to expand Medicaid to all Texans with incomes up to 138 percent* of the federal poverty level ($15,860 for an individual or $32,500 for a family of four in 2013). Under the Affordable Care Act, Texans who are eligible for Medicaid (that is, all families with incomes at or below 138 percent of the federal poverty level) will not be eligible for premium tax credits. Our analysis also takes into account one exception to the income eligibility rules for premium tax credits: The Affordable Care Act allows any legal U.S. residents who are not eligible for Medicaid due to the Medicaid program's five-year ban rule (even if they have income below 100 percent of poverty) to receive premium tax credits. Therefore, our estimates of the number of people who will be eligible for premium tax credits do include legal residents with incomes below 138 percent of poverty who would not be eligible for Medicaid under the five-year ban rule. *Under the Affordable Care Act, the first 5 percent of income is not counted, or "disregarded." This means that the eligibility threshold for Medicaid is 138 percent of poverty, not 133 percent of poverty. Endnotes Office of the Assistant Secretary of Planning and Evaluation, 2013 Federal Poverty Guidelines (Washington: Department of Health and Human Services, January 24, 2013). 1 2 Families USA analysis of U.S. Census Bureau's Current Population Survey, Annual Social and Economic Supplement, 2013, using the CPS Table Creator, available online at http://www.census.gov/cps/data/cpstablecreator.html. Help Is at Hand: New Health Insurance Tax Credits in Texas Acknowledgments This report was written by: Elizabeth Hagan Intern, Health Policy Families USA Kathlen Stoll Deputy Executive Director, Director of Health Policy Families USA Kim Bailey Research Director Families USA The following Families USA staff contributed to the preparation of this report: Alexandra Ernst, Intern, Health Policy Cheryl Fish-Parcham, Deputy Director of Health Policy Claire McAndrew, Senior Health Policy Analyst Elaine Saly, Health Policy Analyst Ingrid VanTuinen, Deputy Director of Publications Rachel Strohman, Editorial Assistant Carla Uriona, Director of Publications Nancy Magill, Senior Graphic Designer Data provided by: The Lewin Group 21 1201 New York Avenue NW, Suite 1100 Washington, DC 20005 Phone: 202-628-3030 Email: info@familiesusa.org www.familiesusa.org