Among all Americans with annual incomes of approximately $60,000 or more, those aged 50 or more years are likely to see the greatest cost savings from premium healthcare tax credits that lower monthly payments for consumers.
That’s is according to a new analysis prepared by researchers at the Urban Institute, with funding support from the Robert Wood Johnson Foundation.
The Urban Institute noted that Congress enhanced the premium tax credits, or PTCs, in health insurance marketplaces in the American Rescue Plan Act of 2021 and extended them through 2025 under the Inflation Reduction Act of 2022. The credits were put in place by Congress to help Americans maintain their health insurance.
Those credits should be extended beyond 2025, according to the researchers.
According to previous analysis from the Robert Wood Johnson Foundation, enhanced PTCs will reduce the number of uninsured Americans by 4 million next year and will boost enrollment in the Affordable Care Act health insurance marketplace by 7.2 million.
“The tax credits lowered out-of-pocket premium payments by 60% for 64-year-olds and 57% for 60-year-olds. Conversely, the tax credits lowered payments for 30-year-olds by just 3%,” according to the more recent study.
In general, the researchers found that without enhanced PTCs, the average 60-year-old with an individual income of $60,241 per year would have to spend 20% of his or her income on health insurance premiums. A 60-year-old with an individual income of $75,301 per year would have to spend 16% of income on premiums.
The researchers concluded that “enhanced premium tax credits improve healthcare plan affordability for millions of people in America, across income group, age and geographic area. If the tax credits expire, many individuals would see out-of-pocket healthcare costs increase significantly,” according to the Urban Institute.
