The Affordable Care Act of 2010 (ACA) focuses on expanding access to healthcare insurance coverage, especially to low and middle-income families and individuals in the United States. Most of the individuals who had no health insurance were mostly low and middle-income individuals in the United States. To increase access to affordable health insurance, a premium tax credit is offered to low-income individuals and families to enable them to afford the insurance health covers that are purchased through Health Insurance Marketplace (). The premium tax credit (PTC) refers to a form of tax credit that is refundable to low-income families and individuals to help them afford such health insurance covers. In other words, it is financial assistance in the form of credit that aims at reducing the amount of health insurance cover for individuals with earning less or equal to 400 percent of the federal poverty level.
Furthermore, such individuals must also be qualified for a Health Plan. In most cases, the dollar value of these subsidies depends on the cost of the ACA benchmark place within the areas of the beneficiary. To ensure that the premium tax credit has benefited the low-income earners, the marketplace computes this tax credit in a such a way that, individual earning the lowest income receives the highest amount of premium tax credit that aims to lower such individual’s monthly premium. In other words, qualified individuals for a premium tax credit may choose to receive all benefits when filling yearly tax returns. This paper aims to discuss and illustrate the effects of Health Insurance Tax Credit on state health outcomes in New Jersey and Virginia using a literature review of the past research works on Health Insurance Tax Credit.
Literature review
According to Statistics (), between the period of 2013 and 2016, New Jersey had a high number of citizens who have taken insurance cover due to tax credit benefits compared to the amount that had sought to support health insurance in Virginia. This is because New Jersey focuses on long term health insurance covers that are beneficial to its members. For instance, once a member takes a long term insurance cover, such individuals will be covered for a long time compared to members who are covered under short time health insurance covers. For instance, by the end of 2016, only 8.4 percent of the total population in New Jersey had no health insurance coverage compared to 9.2 percent from Virginia, who also had no insurance cover. By the end of 2018, only 7.7 percent of the total population in New Jersey had no health insurance, while in Virginia, the people that had not taken health insurance was about 8.9 percent of the total population. In other words, the rate of enrollment of the population into health insurance in New Jersey is high compared to the standard of admission of the community into health insurance in Virginia.
According to (), the premium tax credit in New Jersey is higher compared to the premium tax credit in Virginia. For nuisance, between 2016 and 2017, the average premiums for benchmark plans in New Jersey increased from 330 dollars to 353 dollars compared to the average premium increases for Virgin that grew from 276 dollars to 296 dollars per month. The premium tax credits act as subsidies for low-income earners to enable them to access health insurance covers. According to (), an increase in the premium tax rates reduces the amount of insurance health cover that an individual will pay for such protection. An increase in premium tax credit in New Jersey between 2016 and 2017 increase the ability of low-income earners in New Jersey State to afford the cover compared to the ability of low-income earners in Virginia. As a result, the rate of low-income earners in New Jersey enrolled in insurance health cover is high compared to the standard of enrollment of low-income earners in Virginia in the same period. For instance, according to (), 13.2 percent of health insurance enrollment in New Jersey was done by low-income individuals compared to 11.8 percent of the total health insurance enrollment in Virginia. Such variance in rates of enrollment indicates the effects of tax credit to the enrollment rates. For instance, according to (), in their research on the impact of credit tax on population enrollment into health insurance, they point out that high premium tax credit encourages more individuals with low income to enroll in health insurance. In contrast, low premium tax credit discourages low-income earners from enrolling in health insurance as they are expected to pay more for the cover.
According to (), in their research on health insurance in the US, they concluded that there is improved access to care in Virgin compared to New Jersey. Further, this research pointed out that, as a result of the tax credit offered to low-income families and individuals, this reduced healthcare disparities in Virginia State by 22 percent and also increased access to affordable health care by 12 percent. On the other hand, the tax credit offered to low-income families and individuals in New Jersey reduced healthcare disparities in New Jersey State by 14 percent. It also increased access to affordable health care by 9 percent. This is because of the fact that most of the individuals living in Virginia State are average income earners as the poverty level of this state is 10.8, according to the 2017 US census.
On the other hand, the New Jersey population is comprised of people from both high and middle-class levels. Hence the poverty level of New Jersey, according to the 2017 US census, is 9.50 based on the federal poverty level. According to (), the increased access to affordable healthcare in Virginia is as a result of tax credit that has enabled low-income earners to afford the cost of health insurance as a result of the subsidies offered through a tax credit. Furthermore, reduction in health disparities in Virginia further indicates that availabilities of a premium tax credit, which is available to most of the Virginia population has boosted their ability to cover themselves through health insurance. Hence reducing the health disparities between the high-income earners and low-income earners within the state. On the other hand, focusing on New Jersey healthcare improvement, according to (), reduction of healthcare disparities in New Jersey State by 14 percent indicates that the premium tax credits only covered a small population within the state as most her citizens already had enrolled to health insurance. Furthermore, the increased access to affordable health care by 9 percent in New Jersey as a result of premium tax credit further indicates that a high percentage of the New Jersey population already had access to affordable health care even before the Affordable Care Act of 2010 (ACA) was implemented.
It is focusing on the effect of a tax credit on improvement in primary care transformation in both Virginia and the New Jersey States. New Jersey has established more healthcare centers compared to Virginia. Furthermore, there are also improved technological standards at the New Jersey healthcare system compared to the technological improvement in the Virginia healthcare system. According to (), in their research, the increase in healthcare centers in New Jersey is attributed to the health insurance system of this state whereby there is no delay in payments by the insurance firms that offer health insurance covers in this state. Hence most of the investors in the health field are willing to invest in New Jersey. According to (), the New Jersey states implemented a policy that requires insurance companies offering insurance health covers to clear their clients’ health balances within 72 hours. As a result, this has encouraged many private investors to venture into healthcare.
On the other hand, Virgin State has fewer healthcare centers compared to New Jersey because most of the health centers in this state are owned by the state itself. Furthermore, the Virginia State does not have any form of law that aims at pushing insurance companies that offers insurance health covers to her citizens. Hence, there is a delay by insurance firms when making payment for their clients. This further discourages most of the potential investors willing to invest in Virginia State. Focusing on technological improvement in Virginia healthcare, more still need to be done in terms of technological advancement as most of the healthcare has less invested in technology. For instance, according to () in their research, they pointed out that the Virginia State has a gap in her healthcare technological improvement as electronic health records (EHR) has not been effected in all departs of the healthcare.
Comparing medical access by the patients with long time diseases such as cancer, asthma, and diabetes in both New Jersey and the Virginia States, as a result of health insurance. Patients from both states who have long term illnesses can access medication without any cap in terms of the medical cost. This is a result of the patient bill of rights passed by the federal government that requires the insurance companies offering insurance cover to patients ailing long term diseases to cover all their medical expenses related to their treatment. Concerning this bill of right, any insurance firms that offer its cover to insure a patient who has long term diseases must cover all medical costs of such client. Hence, it is illegal for any insurance firm or companies offering health covers in both States to their clients’ health insurance due to their pre-existing condition of diabetes or any other long term illness such as asthma or cancer. Although the cost of health insurance cover for such an individual is high. The presence of premium tax credits has made it possible for most of the low-income earners in both New Jersey and the Virginia States ailing from long term diseases such as cancer, diabetes, and asthma to have access to health insurance covers through the premium tax credits. This is because such individuals are able to receive high premium tax credits that enable them to afford such insurance covers. Hence, premium tax credit in New Jersey and Virginia states have enabled individuals ailing from long term diseases afford access to insurance health cover and hence improving the success of health care of such individuals at an affordable cost.
Insurance health covers offered by the Affordable Care Act of 2010 (ACA) further provide low-cost health insurance options for students in both New Jersey and the Virginia States. One of these options is a health cover insurance plan whereby parents can cover their children until they reach 26 years. In this way, the premium tax credit offered to parents further serves to covers all the children whose age is less or equal to 26 years. Thus, the health cost of a family is covered. In this way, low-income parents can concentrate on educating their students instead of focusing on their health covers since the parent insurance health cover further covers their children’s health costs.
According (), in their study on the effect of tax credits on medical debts, they pointed out that, in both New Jersey and Virginia states, tax credit have protected enrollees of health insurance against financial hardships such as high medical debts. Currently, individuals in both countries who have enrolled in insurance health can access affordable medical treatment for any cost. Initially, this was difficult as the cost of treatment, especially for long time diseases such as cancer and asthma are very high. Hence most of the patients end up with high hospital debts that, to some extent, could make such individuals bankrupt. According to (), tax credits have made health insurance accessible to low-income families and individuals in both New Jersey and the Virginia States. This has made access to medical services available at an affordable cost since payment of health insurance covers enable citizens in both states to have access to medical services at no charge. Hence premium tax credits have enabled low-income families and individuals in both countries to have affordable health insurance and therefore cautioning them from high hospital debts.