Adam Linker travels around North Carolina talking to community groups about the Affordable Care Act.
Most people understand the law requires everyone to have insurance or pay a fine.
But many are confused about one of the most important provisions – tax credits that will help thousands of low-income families pay for insurance through the new health insurance marketplace, also called exchanges.
“It’s one of the things they know the least about,” said Linker, a policy analyst for the N.C. Justice Center, an advocacy group for the poor.
About 869,000 people will be eligible in North Carolina, including more than 80,000 people in Mecklenburg County alone, according to Families USA, a national nonprofit for health care consumers.
“This reaches very deeply into the middle class … and covers people with moderate incomes,” said Ron Pollack, Families USA executive director.
The tax credits work like a subsidy, and will be paid directly to the insurance companies when premiums come due, Pollack said.
To qualify, individuals or families must have incomes between 100 percent to 400 percent of the federal poverty level, Pollack said. A family of four with an income of up to $94,200 will qualify, and an individual with an income of up to $46,000 will qualify.
Generally, people won’t qualify for the subsidy if they are eligible for health insurance through an employer or a government program.
The size of the tax credits will be based on a sliding scale; the lower the income, the higher the subsidy. Here are some hypothetical examples from Families USA:
• For a 45-year-old single person with a $23,000 annual income, the annual premium for the Silver insurance plan will be about $5,000. The federal government will subsidize $3,550, and the out-of-pocket contribution will be $121 per month (or $1,452 annually).
• For a family of four with an annual income of $35,500, the annual premium for a Silver plan will be $12,500. The subsidy will be almost $11,000, and their out-of-pocket will be $118 a month (or $1,400 per year).
“This is a substantial discount for people,” Linker said.
Enrollment in the exchanges begins in October. The tax credits take effect in January, when insurance for everyone will be required.
People who need assistance to buy insurance will be able to consult with “navigators,” who will be trained by the federal government to provide information about the new insurance marketplace. In North Carolina, community groups will apply for federal grants to hire these navigators, but Linker said most will probably be volunteers.
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