Last updated on: 6/19/2015 | Author:

Does Obamacare Provide Tax Credits to Help Some People Purchase Health Insurance on the Exchanges? – YES

General Reference (not clearly pro or con)

The Patient Protection and Affordable Care Act, Section 36B, “Refundable Credit for Coverage under a Qualified Health Plan,” page 95, signed into law on Mar. 23, 2010, available at the Library of Congress website, states:

“(a) IN GENERAL.—In the case of an applicable taxpayer, there shall be allowed as a credit against the tax imposed by this subtitle for any taxable year an amount equal to the premium assistance credit amount of the taxpayer for the taxable year.”

PRO (yes)


The US Centers for Medicare & Medicaid Services stated in an article titled “Premium Tax Credit,” available at the Affordable Care Act website (accessed June 17, 2015):

“The Affordable Care Act provides a new tax credit to help you afford health coverage purchased through the Marketplace. Advance payments of the tax credit can be used right away to lower your monthly premium costs. If you qualify, you may choose how much advance credit payments to apply to your premiums each month, up to a maximum amount. If the amount of advance credit payments you get for the year is less than the tax credit you’re due, you’ll get the difference as a refundable credit when you file your federal income tax return. If your advance payments for the year are more than the amount of your credit, you must repay the excess advance payments with your tax return.”


Consumer Reports stated in its June 2012 posting “Update on Health Care Reform,” available at its website:

“If you buy on an exchange as an individual, you may qualify for a subsidy in the form of an advance tax credit if your household income is between 100 percent and 400 percent of the federal poverty level. (The tax system already subsidizes people who have coverage through a job by excluding the cost of their health plan from income taxes.)”


The Kaiser Family Foundation stated the following in its Aug. 14, 2013 article “Quantifying Tax Credits for People Now Buying Insurance on Their Own,” available at

“A number of states have recently released information on what premiums will be in the individual insurance market in 2014, when significant changes in that market take effect due to the Affordable Care Act (ACA)…

However, these premiums are in effect ‘sticker prices’ that many people will not pay because they will be eligible for federal tax credits under the ACA to offset the cost of insurance…

Premium subsidies (in the form of federal tax credits) will be available for people buying their own insurance in new marketplaces or exchanges who have incomes from 100% up to 400% of the poverty level (about $24,000 to $94,000 per year for a family of four in 2014). Those with access to affordable employer-provided insurance or Medicaid are ineligible for tax credits.

The amount of the tax credit is based on a benchmark premium, which is the cost of the second-lowest-cost silver plan in the area where a person lives. The tax credit equals that benchmark premium minus what the individual is expected to pay based on their family income (which is calculated on a sliding scale from 2% to 9.5% of income).

Here is how the calculation might work for a 40-year-old individual making $30,000 a year:

Estimated benchmark premium for a 40-year old = $3,857 per year (which will vary from area to area)

Person is responsible for paying 8.37% of their income = $2,512

Tax credit = $1,345

The tax credit can be used in any plan offered in the health insurance marketplace, so the person would end up paying less than $2,512 to enroll in the lowest cost silver plan or a lower cost bronze plan, and more to enroll in a higher cost plan.”

CON (no)


[Editor’s Note: Based upon a neutral reading of the Patient Protection and Affordable Care Act and bi-partisan third party analysis, this question seems to have a clear and obvious Pro (yes) answer, and has therefore presented the responses in a single column with no opposing perspective.]