Under the American Health Care Act’s age-related tax credit system, people who need financial assistance the most would receive less of it than they would under the current law, according to a new report.
The report, from the Urban Institute, compares the value of tax credits under the Affordable Care Act and the AHCA for individuals at different three ages, four income groups and 10 urban insurance markets—five that tend to have low premiums and five that tend to have high premiums.
Overall, researchers found that tax credits would be higher under the AHCA than under current law for younger adults as well as higher-income individuals living in low-premium areas.
In theory, giving more financial assistance to young people could be a positive step toward stabilizing the ACA marketplaces, as it might encourage more of them to purchase insurance and in turn, improve the risk pool.
However, lower-income and older adults would see smaller tax credits under the AHCA than the ACA regardless of whether they live in low- or high-premium areas, the report notes.
In fact, some Senate Republicans may be looking to solve this issue as they retool the version of the AHCA passed by the House, according to The Hill.
Sen. John Thune, R-S.D., and other lawmakers are working on a proposal that would cut off eligibility for tax credits at a lower income point than the House version of the bill would. They’re also considering making the tax credits larger, and tying them to income rather than age.
“Frankly, I don’t think we could pass anything in the Senate unless we figure out a way to improve upon what the House did in respect to the tax credit,” Thune told the publication.