Few Households Received Correct ACA Subsidy Amount, Report Finds
About half of U.S. households that qualified for health insurance premium subsidies under the Affordable Care Act likely will have to return part of the money to the federal government, according to a Kaiser Family Foundation report, Modern Healthcare reports (Rubenfire, Modern Healthcare, 3/24).
For the report, KFF used data from the national Survey of Income and Program Participation (Kaiser Family Foundation study, 3/24).
The subsidies are available to residents with incomes between 100% and 400% of the federal poverty level. According to Modern Healthcare, subsidy amounts are determined based on an individual's projected annual income, which can change over the year (Modern Healthcare, 3/24).
Between 4.5 million and 7.5 million households are estimated to have received subsidies for 2014, according to The Hill. This tax season is the first year that U.S. residents will have to account for ACA premium subsidies on their taxes (Ferris, The Hill, 3/24).
According to Modern Healthcare, subsidy repayments from households whose annual income still qualifies them for subsidies are capped based on family size and income. The caps range from $300 to 2,500. Meanwhile, families whose income makes them ineligible for subsidies will have to repay their entire subsidy (Modern Healthcare, 3/24).
Few Received Correct Subsidy Amount, Report Finds
According to the report, almost all U.S. families who received subsidies either will have to repay a portion of the subsidy or receive a refund because their income changed from their initial calculations. Overall, just 4% of households received a subsidy in the correct amount (The Hill, 3/24).
The report found that while around half of U.S. households are expected to have to return part of their subsidy, roughly 45% are expected to receive a refund. According to the report, households that have to repay part of their subsidy will pay between $667 to $1,380, with an average repayment of $794. By contrast, households eligible for a refund will receive between $412 and $1,601, with an average refund of $773 (Modern Healthcare, 3/24).
According to the report, households with incomes below 200% of the FPL are slightly more likely than other households to have to repay part of their subsidy, with an estimated 54% of such households expected to have to pay back some money.
Meanwhile, the report found that households with an average income:
- Below 200% of the FPL are expected to owe an average of 20% of their subsidy;
- Between 200% and 300% of the FPL are expected to owe an average of 36% of their subsidy; and
- Between 300% and 400% of the FPL are expected to owe an average of 65% of their subsidy (Kaiser Family Foundation report, 3/24).