Adequate Premium Tax Credits are Vital to Maintain Access to Affordable Health Coverage for Older Adults

Over 3 million low- to moderate- income older adults ages 50–64 currently rely on tax credits under the Affordable Care Act (ACA) to purchase health insurance coverage. These tax credits provide critical financial assistance for people who do not have access to affordable health insurance through an employer or a public program.

Proposals to replace the ACA’s tax credits with a new “flat” tax credit, even when adjusted by age, raise significant concerns for older adults. The tax credit proposal included in the American Health Care Act (AHCA) of 2017, as introduced on March 6, would provide substantially less assistance for lower- and moderate-income older adults by as much as $5,900 for an individual.

Older persons would face larger reductions in tax credits than younger persons and, as proposed, the value of the proposed tax credits would erode over time. These changes would put health insurance coverage out of reach for many older adults.

State-level Analysis

State-by-State Impact of Tax Credit and Age Rating Changes Proposed by AHCA

 

Method used for maps:  Calculations are based on 2017 premiums and tax credits from the Kaiser Family Foundation Health Insurance Marketplace Calculator (http://kff.org/interactive/subsidy-calculator/). Premiums under 5:1 were calculated by scaling up 3:1 premiums based on analysis by Joanne Fontana, Thomas Murawski, Sean Hilton, “Impact of Changing ACA Age Rating Structure:  An Analysis of Premiums and Enrollment by Age Band”, Milliman Research Report, January 2017, www.milliman.com/aarp.   

 

Acknowledgement:  The authors would like to thank Robert Neill (AARP Public Policy Institute) and Sibora Gjeçovi (AARP Research Center) for their assistance in producing these maps.

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