MARSHALL - Calling it a "doorway to quality health care" for Minnesotans, Families USA, a national organization for health care consumers, this week released a report that shows that nearly 460,000 Minnesota residents will be eligible for premium tax credits in 2014 to help pay for health coverage under Minnesota's new health insurance exchange.
The report, called "Help Is at Hand: New Health Insurance Tax Credits in Minnesota," includes county-by-county data, which reveal how many Minnesota families in different income brackets (ranging as high as $94,200 for a family of four) would soon be protected from having to spend more than a set percentage of their income for health coverage.
Families USA, a non-profit, non-partisian group, says that under the Affordable Care Act, the premium tax credits take effect in January 2014, following an enrollment process that begins in October. 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 those who need it most will get the greatest financial assistance.
The tax credits will help Minnesotans purchase health insurance that meets their specific needs in a new health insurance marketplace, or exchange, which is being set up by the state. The tax credits will flow directly to the health plans in which families or individuals enroll, offsetting the total cost of plan premiums.
Ron Pollack, executive director of Families USA, said the Affordable Care Act will provide an opportunity to extend health care coverage by enabling states to expand Medicaid programs up to 138 percent of the federal poverty level, with the federal government paying 100 percent of the costs for the first three years and no less than 90 percent thereafter. Individuals can also purchase coverage through the individual marketplace, he said.
The tax credits will help Minnesotans purchase health insurance that meets their specific needs under the new health insurance exchange which is being set up in Minnesota.
The new exchange will offer a range of plans with four different coverage levels (bronze, silver, gold and platinum). 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 plan. Those who choose the silver plan will receive additional help with copayments, deductibles and other cost-sharing.
Pollack said individuals and families will not have to lay out the amount of the tax credit premium subsidies and wait to get reimbursed. Rather, the IRS will pay out the tax credit premium subsidies, and the individual or family only has to pay the remaining portion of the premium.
"This reaches deeply into the middle class and moderate-income families," Pollack said. "It's provided on a sliding scale, so the people with lower incomes will get larger tax credit subsidies."
The tax credit subsidies, Pollack said, will be paid directly to the insurance company the individual or family has chosen. The remaining portion on the premium a person has to pay out-of-pocket would be reduced.
In terms of statewide eligibility for Minnesotans, the report says people with annual incomes between $47,100 and $94,200 for a family of four (incomes between 200 and 400 percent of the federal poverty level), will make up about 57 percent of the Minnesotans eligible for the tax credits.
More than 12,300 residents in area counties - Lincoln, Lyon, Redwood and Yellow Medicine - will be eligible for premium tax credits, the report said. That includes 11,350 employed (full and part time) and 1,030 unemployed residents (those out of the workforce and those not looking for work). Of those, 19.6 percent are under age 18; 37.6 percent are 18-34; 29 percent are 35-54; and 13.8 percent are over 55.
Minnesota's health insurance exchange, which has drawn its share of political criticism, will be governed by a group of seven people appointed by Democratic Gov. Mark Dayton. The group does not include representatives from the medical or insurance industries. The board's expected operating costs of $60 million a year would reportedly be covered with a fee on premiums of up to 3.5 percent.
A federal deadline required each state that chooses to form its own exchange program to have passed a bill by the end of March, with enrollment to start Oct. 1.
The full report is available online at familiesusa2.org/assets/pdfs/premium-tax-credits/Minnesota.pdf