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17 Million People Eligible For Premium Subsidies, Study Finds

Seventeen million people who are now uninsured or who buy their own health insurance will be eligible for tax credits next year to help purchase coverage on the health law’s online marketplaces or exchanges, according to an analysis released Tuesday.

More than a third of those people live in just three states: California with nearly 2 million, Texas with 2 million and Florida with 1.6 million. These states have the highest numbers of uninsured residents and the largest number eligible for tax credits, the Kaiser Family Foundation reported. (KHN is an editorially independent program of the foundation).

A separate study from the McKinsey Center for U.S. Health System Reform found that across the country, 6 million to 7 million people may be eligible to use their federal subsidy to cover the entire premium of the lowest priced plan on the exchange, called a bronze plan. Premiums for bronze plans are the least expensive, but they require greater out-of-pocket costs, such as co-payments for services.

The Kaiser Family Foundation analysis estimates that 29 million people could potentially purchase coverage on the exchanges. In some states the impact could be substantial. In Alaska, 71 percent would be eligible; in Louisiana, 70 percent. Mississippi and South Carolina are close behind, at 68 percent. In Texas, 65 percent of residents would be eligible.

To qualify for credits, individuals must earn between 100 and 400 percent of the poverty level (between $23,550 and $94,200 annually for a family of four) and not be eligible for affordable coverage from an employer or from Medicare or Medicaid. Individuals who are in the country illegally or who are in jail are not eligible for the credits.

The amount of tax credit that eligible people can receive depends on several factors, including their family income and the cost of insurance where they live. People receiving tax credits must pay between 2 and 9.5 percent of income toward the premium.

The Congressional Budget Office estimates that 7 million people will enroll in exchanges in 2014 and of that number, 6 million will be eligible to receive tax credits. The  Kaiser analysis found that about a quarter of potential exchange enrollees would choose to participate in the first year of the health law, with a slightly higher proportion of people eligible for tax credits (35 percent) buying coverage in an exchange.

CBO projects the number of people receiving tax credits in exchanges will triple by 2016.