In early 2021, the American Rescue Plan (ARP) included provisions that increased premium tax credits for individuals enrolled in Affordable Care Act (ACA) marketplace coverage. This allowed people of all income brackets to receive larger tax credits and extended eligibility to those with incomes above 400% of the poverty line for the first time.
The premium tax credits were designed to help uninsured people gain coverage and help the economy recover from the pandemic. They were meant to artificially reduce the cost for health insurance while allowing people to elect a plan that was more affordable through the marketplace. These premium tax credits don’t actually reduce the cost of care or improve the quality of healthcare in America, but it simply allows for taxpayer dollars to make the cost appear lower for qualified individuals.
