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17 Million People Eligible For Premium Tax Subsidies in 2014

Everyone has a close eye on the new ACA Health Insurance Marketplaces, especially how many Americans will purchase a health plan through the Marketplaces and how many Americans will access the new premium tax subsidies. According to a recent analysis by Kaiser Family Foundation (KFF), an estimated 17 million Americans who are now uninsured or who buy insurance on their own will be eligible for premium tax subsidies in 2014. Additionally, 29 million people nationally may look to the Marketplaces to purchase health insurance coverage. Here's a look at the analysis of the premium tax subsidy eligibility, including eligibility by state.

17 Million People Eligible for Premium Tax Subsidies @ZaneBenefits

17 Million People Eligible for Premium Tax Subsidies

The analysis by KFF found that 17 million Americans are eligible for premium tax subsidies. Here's how they got to this number.

  • The analysis started with the pool of Americans who either do not have insurance or who purchase non-group insurance (individual health insurance, etc.). 

  • The analysis assumed that people who are covered by a public program or by employer-based (group) coverage will retain their coverage and would not be eligible for premium tax subsidies. 

  • Two other groups of people were then removed from the potential pool of tax-subsidy eligible individuals: (1) uninsured adults and children whose incomes would make them eligible for Medicaid or CHIP, and (2) people who are not legally residing in the United States. Neither group is eligible for premium tax subsidies under the ACA. 

  • For those remaining in the pool, KFF looked at their family incomes under ACA rules and the premiums that they would face for benchmark coverage to determine whether they would qualify for a premium tax subsidy. 

  • The vast majority of potential eligibles with incomes between 100% and 400% of poverty would qualify for premium tax subsidies.

  • Finally, KFF removed approximately 16% of potential eligibles because research shows that some people who are uninsured or have non-group coverage have access to employer-based coverage, either through an offer from their own employer or through an offer through a spouse or parent. 

  • Those that remained in the potential pool constituted their estimate of tax-subsidy eligible individuals. 

Based on these assumptions, KFF estimated that over 17 million Americans will be eligible for tax subsidies in 2014. 

Estimated Number of Tax Subsidy Eligible Individuals By State

According to the analysis, three states (Texas, California, and Florida) each have more than 1 million residents eligible for tax subsidies, and seven states have more than 500,000 residents eligible (Georgia, North Carolina, Ohio, Pennsylvania, and Virginia). On the flip side, seven states have fewer than 50,000 residents eligible, with the District of Columbia (9,500) and Vermont (27,000) having the fewest. The five states with the most tax-credit-eligible individuals account for about 40 percent of all such individuals nationally.

 

Number of Tax Subsidy Eligible Residents

Potential Market Size

National

17,187,000

28,605,000

Alabama

270,000

464,000

Alaska

55,000

78,000

Arizona

313,000

551,000

Arkansas

150,000

227,000

California

1,903,000

3,291,000

Colorado

254,000

501,000

Connecticut

109,000

216,000

Delaware

29,000

48,000

District of Columbia

9,000

36,000

Florida

1,587,000

2,545,000

Georgia

654,000

1,063,000

Hawaii

29,000

58,000

Idaho

130,000

202,000

Illinois

501,000

937,000

Indiana

354,000

525,000

Iowa

127,000

262,000

Kansas

161,000

298,000

Kentucky

192,000

302,000

Louisiana

344,000

489,000

Maine

77,000

122,000

Maryland

201,000

419,000

Massachusetts

118,000

259,000

Michigan

436,000

725,000

Minnesota

90,000

298,000

Mississippi

204,000

298,000

Missouri

386,000

657,000

Montana

97,000

152,000

Nebraska

122,000

239,000

Nevada

155,000

249,000

New Hampshire

81,000

137,000

New Jersey

400,000

628,000

New Mexico

118,000

193,000

New York

779,000

1,264,000

North Carolina

684,000

1,073,000

North Dakota

43,000

77,000

Ohio

544,000

812,000

Oklahoma

256,000

446,000

Oregon

187,000

337,000

Pennsylvania

715,000

1,276,000

Rhode Island

40,000

70,000

South Carolina

336,000

491,000

South Dakota

70,000

118,000

Tennessee

387,000

645,000

Texas

2,049,000

3,143,000

Utah

206,000

331,000

Vermont

27,000

45,000

Virginia

518,000

823,000

Washington

272,000

507,000

West Virginia

71,000

117,000

Wisconsin

301,000

482,000

Wyoming

47,000

80,000

Source: KFF analysis

According to Kaiser Family Foundation, the analysis used pooled data from the 2012 and 2013 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC). The CPS ASEC provides socioeconomic and demographic information that can be used for national and state estimates. Read more about the analysis methodology here.

29 Million Americans May Look to New Marketplaces for Coverage 

According to the analysis, 29 million Americans may look to the marketplaces for coverage. To get to this number, KFF made the following assumptions:

  • The potential market for coverage in marketplaces started with current non-group purchasers and uninsured people who are legally residing in the United States and who are not eligible for Medicaid or CHIP.  

  • They excluded two groups from among the current uninsured. The first group is people with incomes above Medicaid eligibility levels but below poverty, referred to as the gap group. They also excluded current uninsured people who are in a household of a full-time worker who either has or is offered employer-based insurance. As noted above, these people would be ineligible for premium tax credits, so the assumptions was made that they would choose employer-based coverage rather than non-group coverage if they choose to become insured.

According to KFF, the largest potential markets are in the states with the largest tax-subsidy eligible populations: California, Texas, and Florida. Six states have a potential market of more than 1 million people, and another 12 have a potential market of more than 500,000 people.

Where does your state fall? Leave a comment below.

Guide to Free Health Insurance Subsidies

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