Child Tax Credit: State Actions Won’t Fully Offset Federal Cuts

State Responses to the‍ Expiration of Enhanced Federal premium Tax Credits: A Summary

HereS a⁤ breakdown of how different states are⁣ responding to the expiration of the enhanced federal premium tax credits, based on the provided text:

1. New ‌Mexico:

* ​Will cap premium payments for benchmark plans at 8.5%⁤ of ⁢household income⁢ for enrollees ​ above ⁤ 400% FPL, mirroring the structure of the now-expired enhanced tax credits. Federal credits still available up to 400% FPL.

2. Maryland:

* Will fully ⁢replace the lost federal subsidy for enrollees below ​ 200% FPL.
* Will ‍ partially replace the lost enhanced tax credit for those with incomes between 200% and 400% FPL.
* No state​ assistance will be provided to those above 400% FPL, leaving them subject to the “subsidy cliff.”

3.⁤ California:

*⁢ ⁤Will fully replace​ premium tax credits for⁢ enrollees up to 150% FPL.
* Will partially ​replace lost credits for those with incomes between 150% and 165% FPL.
* ‍ No additional state ‌assistance will be provided to those above ‍ 400% FPL.

4. Colorado & ⁣Washington:

* Both states are creating or adjusting state-specific ‌subsidy programs, offering a flat dollar amount to enrollees.
*‌ These amounts are not enough to ⁢fully backfill the lost federal tax credits.
⁣ * ‌ ⁤ Colorado: Max $80/month individual, +$29/month for each additional family member; ⁤backfills about 40% of lost federal assistance.
* Washington: Retooling “Cascade Care savings” with new fixed dollar maximums: $55/month for those receiving federal tax credits & $250/month for those‌ not receiving subsidies.

5. States with Existing State Assistance (Pre-Enhanced Tax ‍Credits):

* ‍ These states already had⁤ state-specific subsidies in place before the enhanced federal credits existed, and those will remain,‍ nonetheless of the fate of ​the federal extension. ​ These include:
* New York
* Connecticut
​ * Vermont
⁤ * ⁣ Massachusetts
* New Jersey
*⁢ New York & Oregon also operate “basic health plan” programs for very low-income residents, offering lower premiums and cost-sharing independent ‌of federal tax credits.

6. Reinsurance programs:

* Several states operate ‍Section‍ 1332 reinsurance programs to stabilize unsubsidized premiums​ by reimbursing insurers ‍for high-cost claims.
* These programs don’t replace ⁣lost federal ⁣subsidies, but⁣ help reduce‍ the full cost of premiums some consumers (specifically those over 400% FPL) will‍ face ‍in 2026.

Key Takeaway:

While manny states are taking steps to mitigate the impact of the expiring enhanced tax credits,no state is fully replacing the lost assistance for individuals and families with incomes above 400% ‌FPL. These ​individuals will be considerably impacted by the reinstatement of the “subsidy cliff” and will face substantially higher premiums.