The Health Coverage Tax Credit (HCTC) program is tiny compared to better-known public health coverage programs, such as Medicare, Medicaid, and CHIP. Only about 500,000 Americans in 2010 were eligible for the HCTC program, which pays 72.5 percent of private health plan premiums for workers whose jobs were cut because of foreign import competition – Trade Adjustment Assistance (TAA) recipients – and for retirees whose former employers eliminated their pensions.
The Affordable Care Act (ACA) terminated the HCTC program, which will cease at the end of 2013. In 2014, some people in the HCTC program will be eligible for one of two types of benefits created under the health reform law: 1) premium subsidies to purchase coverage from Qualified Health Plans (QHP) through Health Insurance Exchanges (HIX), and 2) Medicaid, which states have the option to expand to people with incomes up to 138 percent of the federal poverty level.
Most HCTC Beneficiaries Will Get Less-Generous ACA Subsidies
The report has some interesting findings about how coverage and subsidies will change for HCTC program participants:
- 37 percent of HCTC participants will be ineligible for subsidized premiums, or premium tax credits, through Health Insurance Exchanges or for the ACA Medicaid expansion because their incomes are too high
- 32 percent will be eligible for premium tax credits to purchase insurance from Qualified Health Plans on the exchanges, but the premiums will be less than what they received from HCTC
- 27 percent, at least, will be eligible for more generous premium subsidies for HIX plans, or will be eligible for Medicaid
- 3 percent might be eligible for Medicaid, depending on whether their states choose to expand Medicaid under the ACA. For more on that subject, see my post, Arguments for and Against States Opting for ACA Medicaid Expansion
Though interesting, the impact of those changes on the federal budget will be minuscule. Only about 22,000 former HCTC participants will be eligible for HIX premium subsidies, and less than 2,000 will be eligible for Medicaid. By contrast, the Congressional Budget Office (CBO) projects about 26 million people will enroll in Qualified Health Plans on the exchanges, and 12 million more people to enroll in the Medicaid expansion by 2022. CBO now projects about 7 million American will lose employer-sponsored health insurance coverage and another 4 million will drop individual (non-group) coverage.
Net of the coverage expansions and loss of private coverage due to crowd out and new costs, CBO estimates that ACA will reduce the number of uninsured by about 45 percent.