Undecided whether to shop for an individual health insurance plan on your state's new online health marketplace when it opens Oct. 1? Perhaps the prospect that the federal government may pick up one-third of your premium will pique your interest.
A new study released by the Kaiser Family Foundation estimates that the tax credit on health premiums, designed to put the "affordable" in health plans made possible under the Affordable Care Act, will average $2,672 per family for those who purchase policies through the state marketplaces, or exchanges. If you purchase the second-lowest (or "silver") level policy, that tax credit will reduce the cost of your premium by 32 percent, or nearly one-third, according to Kaiser.
Obamacare foes have told a different story
The findings contradict claims by some opponents of President Barack Obama's historic health care reform that the cost of health insurance will double under Obamacare because of provisions that eliminate health underwriting and require insurers to spend most of your premium on your health care. Secretary of Health and Human Services Kathleen Sebelius recently took issue with those assertions, calling them "just factually incorrect."
Because health insurance would still prove unaffordable for most of America's nearly 50 million uninsured, Obamacare chips in for some of the bill by instructing the Internal Revenue Service to return a like portion of your federal income tax to you. Kaiser notes that the naysayers continue to incorrectly warn of "sticker shock" on policies without taking into account the tax credits that will benefit those earning up to four times the federal poverty level, or roughly $94,200 for a family of four.
Report says many will get subsidies
The study says nearly half (48 percent) of Americans who currently purchase their own insurance on the individual market rather than obtain it through their employer will be eligible for federal subsidies. Tax credits for this group will average $5,548, or more than double the average for all consumers, including those ineligible for federal help.
Consumers will find out for themselves what their state's marketplace health insurance plans will cost when early enrollment begins Oct. 1. All plans sold through the exchange in 2013 will go into effect in January.
While the Obama administration hopes to see 7 million consumers purchase health coverage through the marketplaces next year, the Congressional Budget Office expects that number to more than triple to 24 million over the coming decade.
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Jay MacDonald is a Bankrate contributing editor and co-author of "Future Millionaires' Guidebook," an e-book by Bankrate editors and reporters.