TRENTON – A report issued today estimates that about 610,000 low- and middle-income New Jerseyans will be eligible for new tax credits next year under the Affordable Care Act.
In addition, residents whose annual income is between 200 and 400 percent of the poverty level will comprise six in 10 of those eligible for the tax credit, according to the report, “Help is at Hand: New Health Insurance Tax Credits in New Jersey.’’
The report, prepared by the Washington-based group Families USA, says the tax credits will allow many previously uninsured residents to offset a portion of premiums.
“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),.” The report stated.
“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.”
Under the ACA, states will have exchanges that are supposed to make it easier – and more affordable – for residents to obtain coverage.
In New Jersey, Gov. Chris Christie opted to let the federal government operate the exchange.
According to the report released today, “robust’’ outreach programs will be needed throughout the country to inform eligible residents of the opportunity to obtain the tax credits.
The report offers some examples of how the ACA tax credits might work.
For example, it offers as one example a 45-year-old single and childless woman earning $23,000.
If the annual premium in the state marketplace in that woman’ ZIP code is $5,000, then her out-of-pocket contribution for premiums for the so-called silver reference plan would be about $1,450 (or about $121 a month).
The remainder of her premium would be 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), the report stated.
The idea is that the exchange should offer needy residents a range of affordable options that also would make it more economical for business operators as well.
The report said the vast majority of those who will be eligible for the premium tax credits – 84 percent – will be in working families.
According to the report’s eligibility breakdown, 46 percent will be white; 15 percent will be black, 29 percent will be Hispanic, and 10 percent will identify themselves as Asian, American Indian, or other group.