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Report: 201K in Md. eligible for health insurance tax credit

About 201,000 Maryland residents will be eligible for financial assistance from the federal government to help pay their health insurance premiums next year if they purchase a plan from the state exchange, according to a new analysis by the Kaiser Family Foundation.

In the same report, the foundation also estimates that about 419,000 Marylanders might ultimately purchase insurance through the Maryland Health Connection, based on the number who are now uninsured but won’t qualify for Medicaid, and the number who currently purchase insurance through existing channels but might look for a better deal on the exchange.

That’s not necessarily the number of people who will actually buy a plan next year — it’s just an estimate of how many people might be likely to consider it, given their current insurance situation.

The Maryland Health Benefit Exchange, which administers Maryland Health Connection, says it expects 150,000 residents to enroll in qualified health plans that begin in 2014. The agency estimates that number will reach 275,000 people by 2020. Enrollment has so far been slow, but officials say that might be because of the exchange’s spotty functionality.

MHBE officials did not immediately return calls for comment Tuesday seeking information about the number of people expected to be eligible for tax credits, the number of people who had so far received notice of eligibility for credits or the average credit amount.

As of last week, that information was not available, according to spokeswoman Danielle Davis.

Under the Affordable Care Act, low- to moderate-income individuals — those with incomes between 100 and 400 percent of the federal poverty level — will receive tax credits toward the cost of their premiums if they buy health coverage from a state or federally run exchange.

Individuals with incomes up to $44,680 and families of four with incomes up to $92,200 will be eligible for assistance. The amount of the credit depends on a person’s income and the cost of health insurance in his or her state.

The law established a limit on the percentage of an individual’s income that he should have to pay for a health plan. If an individual would have to pay more than that amount for a standard plan (perhaps because of age or location), the person will receive a credit.

People living in the country illegally and people with other types of coverage, including Medicaid, Medicare and employer-sponsored coverage (assuming the offered plan meets certain affordability standards) are not eligible for tax credits.

Maryland is among the 25 states that have so far elected to expand Medicaid, meaning uninsured residents making up to 138 percent of the federal poverty level will qualify for Medicaid coverage beginning next year.

Nationally, 29 million people could ultimately turn to the exchanges for coverage; 17 million of them could be eligible for tax credits in 2014, according to the foundation, a nonprofit group that studies health policy issues. By 2018, 20 million people who buy marketplace coverage could be receiving tax credits, according to the Congressional Budget Office.