American Health Care Act: Premium Tax Credits (Proposed Bill)

We start today’s installment of the health care bill translation with discussion about advanced tax credits. I know, that sent chills of excitement down your spine, didn’t it!?! Either way, under the Affordable Care Act, any tax credits for health care that were advanced and overpaid had to be paid back to the government. There is no real surprise there and it seems only fair, right? Well, there was a plan in place on how much the government would get back, a limit on repayment. For the years 2018 and 2019, there will now be no limit. If you are given an advanced tax credit for health care, you will be required to pay back any and all over-payments, regardless of the amount and personal income. This still seems fair but perhaps it would also be a good idea to work on calculating payments and credits more accurately.

For the purposes of this tax credit, the term “Qualified Health Plan” would now include plans that are not offered on State exchanges. It would not include a grandfathered or grandmothered health plan or one that includes coverage for abortions unless it was necessary to save the life of the mother. Women can still opt to buy separate insurance that would cover abortion but they cannot use or claim any tax credits for that plan. Should any side effects, illness, or injury occur because of an abortion, the treatment of those things would be able to be treated by a health plan that is paid for by credits.

Advanced payments of tax credits will not be made for any health insurance plan that is not part of the State exchange. If you wish to claim the credits for non-exchange plans, you will need to include a statement with your tax return showing that it is a qualified health plan, the months you were covered, the adjusted monthly premium for a silver plan at the second lowest cost (wow that is getting specific), and any other information requested in the  future. These requirements for information will not apply to any coverage starting in January 2020.

Seniors are seeing another raise in their health care premiums through this bill starting in the 2019 tax year. Should they be eligible to receive any premium tax credits, the percentage of personal income that they are required to pay towards premiums increases with age once you get income above 150% of the poverty line.

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And really, this doesn’t just affect seniors. The older you are, the more  you will pay. Have a younger spouse? Well that won’t help either! My husband is 12 years older than me. Filing a joint return means that his age is the one they base the required percentage off of. That could mean 2% or more difference and it would be another 30 years before we are both in the same bracket and that won’t matter because the premium tax credits will be gone after the 2019 tax year. Why does age matter for tax credits anyway? Isn’t a dollar still a dollar no matter whose pocket it is in?

Next up… Small Business Tax Credit…

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