Minnesotans buying health insurance through MNsure are benefiting from $48.3 million worth of federal tax credits this year, an increase of more than 50 percent compared with subsidies received for 2014.
On average, about 55 percent of people who enrolled in health plans through MNsure this year received federal tax credits that discount premium costs, exchange officials said Tuesday.
The share is up from 2014, when about 40 percent of people buying commercial coverage through the exchange qualified for tax credits.
"These tax credits act like instant discounts off monthly health insurance premiums," said MNsure Chief Executive Allison O'Toole in a statement.
Minnesota launched the MNsure exchange two years ago to implement the federal Affordable Care Act, which requires almost all Americans to have health insurance or pay a tax penalty.
To help people at certain income levels afford coverage, the health law provides tax credits to people who buy insurance through MNsure and government-run exchanges in other states. The subsidies are available to individuals and families who buy health insurance on their own, rather than getting coverage from an employer or the government.
Minnesotans have been less likely than residents of other states to qualify for tax credits because health insurance premiums in the state were among the lowest in the nation in 2014. Subsidies depend on a person's income as well as the cost of coverage in different regions.
Premiums in Minnesota's individual market increased in 2015, and the numbers released Tuesday by MNsure show that total tax credits also increased.
The $48.3 million in subsidies are being spread across 26,772 people this year. Last year, about 16,100 Minnesotans collectively received about $30.9 million in tax credits.
Even so, numbers released Tuesday by the federal Centers for Medicare and Medicaid Services show that subsidies to Minnesotans continue to lag per-person tax credits for people in other states.
Whereas the national average tax credit is $271 per month, the average in Minnesota is $154 — the lowest of any state. And while 55 percent of people buying through MNsure received a tax credit in 2015, the share across the country was 83.8 percent.
Two factors drive the difference, said Shane Delaney, a MNsure spokesman. First, market premiums in Minnesota continued to be very low in 2015 relative to the nation. In addition, Minnesotans overall receive less in tax credits because people at income levels that qualify for big subsidies in other states are covered by the MinnesotaCare program here.
"We get 95 percent of the value of the tax credits, and they do flow to the state of Minnesota," said Sen. Tony Lourey, DFL-Kerrick. "They support a [MinnesotaCare] program that is much more generous than anything that the private market is making available to individuals."
Next year, premiums in the individual market are expected to increase by an average of 41 percent, so MNsure officials believe that even more people will qualify for subsidies. An individual earning up to $47,080 a year, or a family of four earning up to $97,000 a year, might qualify for financial help through the exchange.