Potential Changes to Premium Tax Credits for Farm Families

Understanding the Potential Impact on Farm Families

The director of the Center for Agricultural Law and Taxation at Iowa State University, Kristine Tidgren, has issued a warning about a looming change in federal health insurance that could have significant consequences for farm families. This change centers around the expiration of the premium tax credit, which is currently helping many families cover a large portion of their health insurance costs.

The Expiration of the Premium Tax Credit

The premium tax credit is set to expire at the end of the year, and if Congress does not intervene, individuals and families with earnings over 400 percent of the federal poverty limit will become ineligible. Tidgren emphasizes that this threshold is not particularly high, but those affected could face substantial increases in insurance costs if they purchase through the healthcare marketplace.

The Financial Implications

To provide context, Tidgren explains that a married couple making $80,000 annually would exceed this income limit. With a premium tax credit, their insurance might currently cost $12,000 a year, but without the credit, expenses could soar to as much as $32,000 annually. This potential financial burden is especially concerning for those nearing retirement age who aren't yet eligible for Medicare.

Seek Guidance from a Trusted Tax Professional

Tidgren advises those who might be affected by this change to consult with a trusted tax professional to assess their situation and explore potential strategies. With proper planning, farm families can better prepare for these potential changes in their health insurance costs.