Definition: Government affordability credits are being used in the health insurance reform bill to help American citizens afford health care coverage in the health insurance exchange. Since part of the health insurance reform bill mandates insurance, these affordability credits are there to help individuals and households afford the mandated insurance requirement.
Here is how it would work: Once someone is eligible for the proposed insurance exchange, the government would then determine how much they would be responsible for in paying for their insurance. If the insurance coverage available to them is higher than the amount the government deems the individual is responsible for, then the government would pay for the remaining amount with the government affordability credits.
Also Known As: affordability credit
Examples:
Jane has never had health insurance before but once the health insurance reform bill passes she will be required to purchase health insurance. She would be eligible for the insurance exchange and the insurance available through the insurance exchange will cost her $8 thousand per year. The government will cover $6 thousand of that cost and Jane will need to pay the $2 thousand remaining amount, which was determined by her income.
