- More than 8 in 10 individuals with a plan selection for 2015 Marketplace plans qualify for an advance premium tax credit.
- Advance premium tax credits will reduce premium costs by over $1 billion a month.
- Almost 6.5 million individuals qualify for an average advance premium tax credit of $268 per month.
- The average advance premium tax credit covers about 72 percent of the gross premium.
- The average net premium is $105 per month among individuals with plan selections qualifying for an advance premium tax credit.
- Nearly 8 in 10 individuals had the option of selecting a plan with a premium of $100 or less after applying the advance premium tax credit.
1All premium estimates in this report are based on plan selections during the 11-15-14 to 1-30-15 reporting period.
2The premium tax credit (“PTC”) is calculated as the difference between the cost of the adjusted monthly premium of the second-lowest cost silver plan with respect to the applicable taxpayer and the applicable contribution percentage that a person is statutorily required to pay deter-mined by household income. An individual may choose to have all or a portion of the PTC paid in advance (advance premium tax credit or “APTC”) to an issuer of a qualified health plan in order to reduce the cost of monthly insurance premiums. APTCs are generally available for individuals with a projected household income between 100 percent (133 percent in states that have chosen to expand their Medicaid programs) and 400 percent of the Federal Poverty Level (FPL). For 2015, the percentage of household income that a qualified individual or family will pay toward a health insurance premium ranges from 2.01 percent of household income at 100 percent of the FPL to 9.56 percent of income at 400 percent of FPL. For more information on the required contribution percentage, see http://www.irs.gov/pub/irs-drop/rp-14-37.pdf
"More than 8 in 10 Individuals in the Marketplace Receive an Advance Premium Tax Credit in the 37 States Using the HealthCare.gov Platform
In all 37 states using the HealthCare.gov platform, the large majority of individuals selecting or being automatically reenrolled into a Marketplace plan qualify for an advance premium tax credit, with almost 6.5 million individuals qualifying for an advance premium tax credit. Across all 37 states using the HealthCare.gov platform, 87 percent of individuals with a plan selection qualify for an advance premium tax credit.3,4 Based on plan selections and re-enrollments as of January 30, 2015 for the current open enrollment period, advance premium tax credits are estimated to reduce premiums by over $1 billion a month for individuals selecting health insurance coverage through the Marketplaces in the 37 states using the HealthCare.gov platform.5
Advance Premium Tax Credits Significantly Reduce Monthly Consumer Premiums in the States Using the HealthCare.gov Platform
Substantial financial relief from monthly premium costs is available for individuals qualifying for advance premium tax credits. On average, advance premium tax credits reduced monthly premiums for individuals by 72 percent. Among individuals qualifying for an advance premium tax credit, average gross monthly premiums before advance premium tax credits for 2015 coverage would have been $374. The average advance premium tax credit amount for qualifying individuals was $268, resulting in a net premium after advance premium tax credit of $105.
Nearly 8 in 10 Individuals Could Select a Plan with a Premium of $100 or Less after Applying the Advance Premium Tax Credit in the HealthCare.gov States
Across all consumers plan selections with or without advance premium tax credits,79 percent have available an option with a net premium of less than $100 after the advance premium tax credit given the available plans in their rating areas.6 Based on actual plan choices and re-enrollments to date, 53 percent of individuals have selected or re-enrolled in a plan with a net premium of $100 or less after advance premium tax credit.
Similarly, 66 percent of individuals could select a plan with a premium of $50 or less after the advance premium tax credit, but based on plan selections and re-enrollment to date, only 31 percent of individuals have selected or re-enrolled in plans with a net premium of $50 or less after the advance premium tax credit.7
TABLE 1: Reduction in Average Monthly Premiums from Advance Premium Tax Credits from November 15, 2014 through January 30, 2015, 37 HealthCare.gov States8
| State | Total Number of Individuals with a Plan Selection (as of 1-30-15) | Percent of Plan Selections with APTC | Average Monthly Premium before APTC | Average Monthly APTC | Average Monthly Premium After APTC | Average Percent Reduction in Premium after APTC |
|---|---|---|---|---|---|---|
| Alaska | 17,466 | 88% | $652 | $534 | $119 | 82% |
| Alabama | 142,525 | 89% | $360 | $268 | $92 | 75% |
| Arkansas | 56,970 | 88% | $397 | $287 | $110 | 72% |
| Arizona | 174,440 | 75% | $288 | $158 | $130 | 55% |
| Delaware | 21,276 | 83% | $411 | $265 | $146 | 64% |
| Florida | 1,339,791 | 93% | $384 | $297 | $88 | 77% |
| Georgia | 448,512 | 90% | $353 | $277 | $76 | 79% |
| Iowa | 38,243 | 85% | $380 | $263 | $117 | 69% |
| Illinois | 296,293 | 78% | $343 | $210 | $133 | 61% |
| Indiana | 193,567 | 88% | $446 | $325 | $120 | 73% |
| Kansas | 82,960 | 80% | $307 | $214 | $94 | 70% |
| Louisiana | 148,552 | 89% | $430 | $322 | $108 | 75% |
| Maine | 64,069 | 89% | $434 | $337 | $97 | 78% |
| Michigan | 304,679 | 88% | $373 | $240 | $133 | 64% |
| Missouri | 219,065 | 88% | $370 | $284 | $86 | 77% |
| Mississippi | 87,356 | 94% | $411 | $364 | $47 | 89% |
| Montana | 48,356 | 84% | $351 | $232 | $119 | 66% |
| North Carolina | 479,748 | 92% | $418 | $317 | $100 | 76% |
| North Dakota | 15,997 | 86% | $375 | $230 | $145 | 61% |
| Nebraska | 64,008 | 88% | $355 | $245 | $110 | 69% |
| New Hampshire | 47,434 | 70% | $392 | $251 | $141 | 64% |
| New Jersey | 216,425 | 83% | $481 | $309 | $172 | 64% |
| New Mexico | 44,431 | 75% | $332 | $202 | $130 | 61% |
| Nevada | 56,421 | 90% | $373 | $248 | $125 | 67% |
| Ohio | 202,379 | 84% | $397 | $247 | $150 | 62% |
| Oklahoma | 105,668 | 79% | $302 | $208 | $95 | 69% |
| Oregon | 94,126 | 78% | $343 | $203 | $141 | 59% |
| Pennsylvania | 429,996 | 81% | $361 | $230 | $132 | 64% |
| South Carolina | 172,360 | 88% | $373 | $283 | $90 | 76% |
| South Dakota | 18,554 | 88% | $364 | $234 | $130 | 64% |
| Tennessee | 193,207 | 82% | $321 | $211 | $110 | 66% |
| Texas | 969,461 | 86% | $337 | $242 | $95 | 72% |
| Utah | 120,391 | 88% | $250 | $159 | $92 | 63% |
| Virginia | 329,447 | 83% | $353 | $260 | $93 | 74% |
| Wisconsin | 182,581 | 89% | $450 | $319 | $130 | 71% |
| West Virginia | 28,482 | 85% | $457 | $314 | $143 | 69% |
| Wyoming | 18,463 | 91% | $558 | $423 | $135 | 76% |
| Total for 37 States Using HealthCare.gov Platform | 7,473,699 | 87% | $374 | $268 | $105 | 72% |
Methodology and Limitations
Enrollment information is based on active qualified health plan (QHP) selections in the CMS Multidimensional Insurance Data Analytics System (MIDAS) from November 15, 2014 to January 30, 2015. We use the term “enrollees” to refer to individuals with active Marketplace individual market health plan selections; it does not refer to “effectuated enrollees”—individuals who selected a health plan and paid the premium.9 Data in this report are based on plan selections and auto-reenrollment: as such, they do not reflect (a) any updated information for re-enrollees that could change the premium or value of the advance premium tax credits that may have occurred after January 30, 2015; and (b) effectuated enrollees for whom coverage takes effect after payment of monthly premiums.
Average Premiums
Premium Tax Credits
| Single Adult Income11 | Percent of the Federal Poverty Level | Maximum Percent of Income Paid toward Second-Lowest Cost Silver Plan | Maximum Monthly Premium Payment for Second-Lowest Cost Silver Plan |
|---|---|---|---|
| $11,670 | 100%12 | 2.01% | $20 |
| $17,505 | 150% | 4.02% | $59 |
| $23,340 | 200% | 6.34% | $123 |
| $29,175 | 250% | 8.10% | $197 |
| $35,010 | 300% | 9.56% | $279 |
| $40,845 | 350% | 9.56% | $325 |
| $46,797 | 401% | Not Applicable | No Limit |
Source: Applicable percentages for 2015 coverage are available at: www.irs.gov/pub/irs-drop/rp-14-37.pdf. The 2014 Federal Poverty Guidelines, used for premium tax credits for 2015 coverage, are at: http://aspe.hhs.gov/poverty/14poverty.cfm.
Many families may also be eligible for premium tax credits. For example, suppose a family with an income of $60,000 was shopping for Marketplace coverage for 2015 for all four family members. The family’s household income is equivalent to 252 percent of the FPL; therefore, the family’s premium is capped at 8.15 percent of income or no more than $407 per month for the benchmark second-lowest cost silver plan in its local area. If the premium for the second-lowest cost silver plan for the family is $805 per month, the family will receive a tax credit of $398, based on a premium after advance premium tax credits of $407 ($805 – $407 = $398). The family can apply its $398 premium tax credit toward the purchase of coverage in any metal level. Note that the maximum percent of household income paid toward the second-lowest silver plan is adjusted annually by a measure of the difference between premium growth and income growth.