Half of the American households that were eligible for insurance premium subsidies in 2014 under the Affordable Care Act are expected to face repayment of some or all of those credits.
But 45% of households may receive a refund as a result of changes in income during the year, according to a report released Tuesday by the Kaiser Family Foundation.
Households with starting incomes below 200% of poverty are somewhat more likely to face some repayment; roughly 54% will be required to do so, the report stated. Tax preparers Jackson Hewitt and H&R Block have reported that similar amounts of their early filing customers have been required to issue repayments.
The average repayment amount is about $794 and ranges from $667 to $1,380. The average refund is $773, and ranges from $412 to $1,601.
Families and individuals qualify for varying amounts of the insurance premium subsidies, issued as tax credits, based on their income, but it's not uncommon for income to change over the course of a year. Advance and final premium tax credits for 2014 were available for those making from 100% of the federal poverty level, $11,490 for a single individual, to 400% of the poverty level, $45,960 for a single individual.
Households that continued to have an annual income within the subsidy range will have caps on their repayment amounts, ranging from $300 to $2,500, based on family size and income. Households with incomes that rise above the range of eligibility would be forced to repay their entire advance credit without any cap.
Though some Americans may have to repay some subsidies, a study by the U.S. Government Accountability Office found that the credits appear to be doing what they were intended for: getting more Americans insured. Early evidence cited by the GAO suggests that the credit likely contributed to a reduction in the uninsured rate in 2014, in part because it brought down premium costs for eligible Americans.
One survey cited by the GAO estimated that the uninsured rate among individuals with credit-eligible incomes fell 5.2 percentage points between September 2013 and September 2014. The subsidies reduced premium costs by an average of 76% last year, according to the GAO.
However, the same study found that some nonelderly adults may still face challenges maintaining coverage. About 16% of nonelderly adults remained uninsured as of this month, including low-income adults who live in states that chose not to expand Medicaid and others who do not have affordable employer-sponsored insurance and are not subsidy-eligible.
Data for how the credits impacted 2015 premiums are not yet available, but premiums have changed only modestly since last year. The Congressional Budget Office projects that 18 million people will receive subsidies, on average, each month by 2017. Approximately 6.7 million people obtained subsidies in 2014.
The fate of premium subsidies is in the hands of the U.S. Supreme Court, which is expected to rule in June whether the tax credits should be allowed in states that haven't established their own exchanges.