Expanding Premium Tax Credits to Middle-Income Families Would Reduce the Number of People Uninsured and Increase Marketplace Enrollment

Brief

Expanding Premium Tax Credits to Middle-Income Families Would Reduce the Number of People Uninsured and Increase Marketplace Enrollment

February 22, 2021

Abstract

In this brief, we analyze a policy that would expand Marketplace premium tax credits by raising the eligibility cutoff from 400 to 600 percent of the federal poverty level (FPL). The policy would lessen the financial burden of high premiums for such families and increase Marketplace enrollment for this group. A potential drawback, however, is that some employers might stop offering employer-sponsored insurance to their workers. However, we find such concerns unwarranted. Research shows most employers responded the Affordable Care Act (ACA) by increasing the rate at which they offer insurance to their employees. Incorporating that evidence, our analysis finds extending the eligibility cutoff for Marketplace premium tax credits to 600 percent of FPL would decrease the number of people uninsured by more than 116,000, and 48,000 people with non-ACA-compliant coverage would enroll in Marketplace plans. Together, these effects would move 164,000 people into plans providing minimum essential coverage.

Research Area: 

Centers

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