Minnesota's health insurance exchange is estimating that this week's federal stimulus legislation will deliver more than $70 million in new tax credits to discount premium costs for subscribers.
The savings come through enhanced tax credits for the roughly 54,000 people who buy coverage through MNsure and qualify for income-based subsidies.
In addition, the law expands eligibility for subsidies to people with incomes above 400% of the federal poverty threshold, which works out to about $51,000 for an individual or $104,800 for a family of four. That means another 54,000 people at those income levels who currently buy through MNsure will qualify for tax credits.
"The value of subsidies enrolled members are going to receive is just above $70 million," said Nate Clark, the MNsure chief executive, in an interview. "So premiums are going to go down — the average statewide premium impact is a 19% savings."
It's not yet clear exactly when consumers will see the savings. Tax credits through MNsure typically are available to consumers in advance, so they can discount current premium expenses rather than refund the money during the following year's tax season.
"Timing is still [to be determined] on when consumers will see the tax credits advanced for plan year 2021," MNsure said in a statement. "We should know more soon."
The federal-stimulus legislation significantly expands for two years health insurance subsidies provided under the federal Affordable Care Act (ACA). Minnesota launched the MNsure health exchange to implement the ACA, which transformed the individual health insurance market by providing income-based tax credits to those who buy coverage through a government-run exchange.
The individual market includes people who aren't covered by employer-based health plans, and don't qualify for the government-run Medicare and Medicaid insurance programs. In April 2020, about 160,000 people in Minnesota were covered through individual market health plans.
