Premium Tax Credits Tied to Age Versus Income and Available Premiums

Differences by Age, Income, and Geography
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The American Health Care Act’s (AHCA) age-related tax credits are not as well targeted to those with greatest need as Affordable Care Act (ACA) assistance.



The Issue

Researchers examined the size of tax credits for people at ages 25, 45, and 64, as well as for an example family at various income levels. They examined the premium levels in 10 cities, five of which have relatively low premiums and five of which have relatively high premiums.

Key Findings

  • Regardless of where they live, lower-income older adults currently receive higher tax credits under the ACA than they would under the AHCA.

  • People living in high-cost areas would get smaller credits from AHCA because the AHCA does not vary by geographic location while the ACA does.

  • Marketplace competition and associated premiums, as well as age and family income, largely determine whether people would receive higher tax credits under the ACA or the AHCA.

Conclusion

The authors compared tax credits offered through the ACA with those in the AHCA and found that younger people typically receive larger insurance premium tax credits under the AHCA, while older adults typically receive larger premium tax credits under the ACA.

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