Expanding Eligibility for Marketplace Tax Credits: A Potential ACA Fix?
<p>If the Affordable Care Act (ACA) survives the latest effort to undo it, there is an opportunity for bipartisan policy solutions in Congress to fix some of the law’s shortcomings. One of these is the high cost of marketplace coverage for some people who earn too much to qualify for ACA tax credits.</p><p>In a new Commonwealth Fund issue brief, RAND analysts Jodi Liu and Christine Eibner examine the potential effect of extending eligibility for tax credits to Americans with incomes above 400 percent of the federal poverty level—the current cutoff for premium subsidies. The authors find that implementing a more generous eligibility threshold would increase the number of people with insurance coverage by 1.2 million, at a federal cost of $6 billion. The mostly middle-income adults ages 50 to 64 who stand to benefit would be healthier than current enrollees their age, which would improve the risk pool and lower premiums.</p>
<p>“Our analysis demonstrates that the extension of the ACA’s tax credits to all income levels is one option to provide some financial relief to middle- and upper-middle-income households,” the authors write.</p>