Members of the House want – repeat, want – federal and state agencies to include Social Security benefits income when determining whether individuals are eligible for the new federal health insurance tax credit.
One bill that would make that change, H.R. 674, passed Thursday by a 405-16 vote.
A second bill that would make the same change, H.R. 2576, passed just 47 minutes earlier with a 262-157 vote.
H.R. 674 was introduced by Reps. Wally Herger, R-Calif., and Earl Blumenauer, D-Ore.
H.R. 674 would change the tax credit eligibility formula, and it also would eliminate a rule that could require the government impose a 3% withholding requirement on some payments that government entities make to vendors.
H.R. 2576, introduced by Rep. Diane Black, R-Tenn., would simply change the tax credit eligibility formula.
The proposed tax credit change could affect implementation of part of the Patient Protection and Affordable Care Act of 2010 (PPACA).
If PPACA takes effect on schedule and works as drafters expect, it is supposed to create a “refundable tax credit” that will help individuals with incomes from 133% to 400% of the federal poverty level buy health insurance through a new system of health insurance exchanges.
PPACA requires the government to use “modified adjust gross income” (MAGI) in tax credit and Medicaid eligibility calculations. MAGI excludes Social Security benefits.
Analysts at the congressional Joint Committee on Taxation say putting Social Security benefits in the calculation would save $702 million in 2014, when the tax credit program is supposed to start to take effect, and about $13 billion from 2014 to 2021.