WASHINGTON – About 8 percent of Illinois residents will be eligible for help paying for their health insurance, starting in 2014, according to a report released Tuesday.
The assistance – to come in the form of insurance premium tax credits estimated to be worth $3.9 billion the first year – will be available under the federal insurance reform law (the Patient Protection and Affordable Care Act) that took effect in March.
Most of the changes under the law are being rolled out gradually this year and through 2014.
The tax credits are expected to benefit largely low- and middle-income people, but eligibility will be determined by more than household income.
The credits are structured so that nobody has to spend more than a specified percentage of their income on health insurance, according to Families USA, a national health care consumer organization. So other factors, such as whether people have health coverage available through their employer, how much the worker pays for the coverage and how big a bite the monthly premium costs take out of the family budget will come into play.
In a report released Tuesday, Families USA said people eligible for the tax credits will generally include those with family incomes falling between 133 and 400 percent of the federal poverty level.
That is between $14,400 and $43,300 for an individual and $29,325 and $88,200 for a family of four, according to this year's federal poverty scale.
"So it reaches broadly into the middle class," said Ron Pollack, the organization's Executive Director
The tax credits will be advanceable to pay premiums when they're due (meaning people won't have to wait until tax filing time to get them) and refundable for those whose tax bill comes to less than the amount of the credits, according to Pollack.
In all, the credits will reduce taxes for Illinois residents who qualify by $3.9 billion, he said.
"This is the largest middle-income tax cut in history, and it will enable many hard-working people in Illinois to afford health insurance premiums that have stretched family budgets," he added.
Other findings in the report:
– 1,059,100 people in Illinois will be eligible for the new premium tax credits.
– 93 percent of those eligible live in working families.
– Most of those eligible are at the higher end of the income eligibility range: 29 percent have incomes up to 199 percent of the federal poverty level and 71 percent have incomes from 200 to 399 percent of the federal poverty level
– Of the tax credit-eligible in Illinois, 431,500 are now uninsured and 627,599 are insured and struggling to pay the premiums.
Jim Duffett, executive director of Campaign for Better health Care, said the tax credits will reach "the vast majority" of those who need help, though there may be some instances in which people are struggling to pay for health insurance but don't qualify for help because their income is too high.
However, he also said, more than 1 million people helped isn't "small potatoes."
"In these tough economic times, it's reassuring to know health care reform is already working and will provide real economic relief."