New IRS Data Shows Impact of Obamacare


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  • Incomes & Spending
    • Federal Tax Returns
      • Credits and Payments
        • Premium Tax Credit
      • Taxes Filed, Taxes Paid
        • Health Care Individual Responsibility Payment

IRS Statistics of Income is one of my favorite datasets, because it aggregates data from individual income tax returns. Everyone (mostly) who files an income tax return is included in the data. I’ve written about my love for tax data extensively.

The IRS just released tax data for returns filed for 2014, the first year of the health exchanges and individual mandate in the Affordable Care Act (ACA), commonly known as Obamacare. Last year, there were a couple ACA-related indicators, related to the additional taxes on high-income earners.

This year, the new indicators are much more closely related to people affected by the ACA from a healthcare point of view. One new indicator shows people receiving premium subsidies through healthcare exchanges, a fundamental component to the ACA. Another indicator shows people opting not to purchase health insurance, who instead pay a penalty as part of their taxes.

(You may recall, in the first major Supreme Court case on the ACA, Chief Justice John Roberts ruled that the individual mandate to have insurance was constitutional, writing “The Affordable Care Act’s requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax.”)

So what does this new data show us? Some really crazy stuff! Here’s a map of percent of people getting subsidies:

Wisconsin has such a higher rate of adoption than its surrounding states, like Minnesota, which, in 2014, has almost no one receiving a subsidy. I’m looking into reasons for this, and though I don’t have anything definitive yet, I have a few ideas. Wisconsin is one of the few states in the northern section of the country not to adopt the expanded Medicaid provision of the ACA, meaning low-income people that would have otherwise been eligible for Medicaid instead got subsidized commercial plans. Minnesota and Iowa did adopt expanded Medicaid, so it makes sense that fewer people there would get the premium credit. Furthermore, Minnesota’Net Premium Tax Credits state healthcare exchange had a rocky rollout, perhaps explaining the limited adoption in its first year.

There are other odd patterns. Look at the average amount of subsidy each filer receives in the Philadelphia area:

Check out the steep difference in subsidies in Pennsylvania once you leave the Philadelphia area! I don’t know the reason for this, but it isn’t explained by income, or even political affiliation (lest you think some people are declining the subsidies out of opposition to Obamacare). It may be indicative of higher health insurance premium costs in the Philadelphia metro area. Could this indicator be used as a proxy for insurance rates, comparable across the country? I’m excited to see how people use this data.

On thecapture other side, we have the percent of people paying the penalty for not having health insurance:

Clearly, those of us in the BosWash Corridor like our health insurance. People that live in some of the more rugged parts of the country, like the mountain west, seem to have a higher risk appetite.

For both of these new indicators, you can use the Variable menu in the legend to choose between the percent of filers, the number of filers, the average amount each filer is getting or paying, and the aggregate amount that all filers in the area are getting or paying.

But wait! There’s more! Aside from the new ACA-related indicators, there’s also new data on people receiving help from volunteers, including from the Volunteer Income Tax Assistance (VITA) program and the Tax Counseling for the Elderly (TCE) program. I get that not everyone loves the 1040 form as much as I do, and this is a good set of indicators of people that need assistance filing their taxes.

Where can you find all these indicators? They’re all in the “Incomes & Spending” menu, under “Federal Tax Returns”. The Premium Tax Credit data is in the “Credits and Payments” submenu. The Health Care Individual Responsibility Payment data is in the “Taxes Filed, Taxes Paid” submenu, under “Income & Other Taxes” (as it’s not actually a tax based on income). The new indicators on volunteer preparers are also in “Taxes Filed, Taxes Paid”, under “Filers”.