Helping Consumers Understand the New Premium Tax Credit

Survey data show that the largest barrier to health coverage is difficulty finding a plan that families can afford. Beginning in 2014, the Affordable Care Act (ACA) introduces major reforms, including the start of a new advance payment Premium Tax Credit designed to lower the cost of coverage for qualified families purchasing in the new Health Insurance Marketplaces (exchanges). These advanceable and refundable features of the new tax credits introduce new elements that most consumers haven’t previously encountered. These facts raise the possibility that consumer confusion might be a barrier to using this new program to enroll in affordable coverage.