An IRS audit of 2015 individual tax returns found that 5 million returns claimed a total of $18 billion in premium tax credits, an increase of more than 60% from 2014. About 5.7 million returns received advance premium tax credits totaling $20 billion, up 66.4% from the prior year, according to a May 30 IRS report. A premium tax credit helps pay exchange plan premiums and is paid when the taxpayer files a return. An advanced premium tax credit goes right to a taxpayer’s insurance company at the start of a new coverage year.
The increased premium credits stem from higher marketplace enrollment and improved enrollee understanding of how to claim cost-sharing reductions, according to a Health Affairs analysis of the report. Marketplace enrollment jumped by about 25% in 2015 from 2014.
But it’s unclear how much longer Americans will be able to count on the financial aid. President Donald Trump repeatedly has called for ending the subsidies and considered using them as a bargaining chip to get Democrats to support legislation that will repeal the Affordable Care Act.
On May 22, the Trump administration stalled a lawsuit challenging whether the federal government can pay the subsidies without congressional approval. House Republicans sued the Obama administration and won the case in U.S. District Court. The decision won’t take effect while the Trump administration determines whether it will continue the Obama administration’s appeal in the U.S. Court of Appeals for the District of Columbia Circuit.
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Virgil Dickson reports from Washington on the federal regulatory agencies. His experience before joining Modern Healthcare in 2013 includes serving as the Washington-based correspondent for PRWeek and as an editor/reporter for FDA News. Dickson earned a bachelor’s degree from DePaul University in 2007.