Originally Posted by roadfix
My understanding is that the "tax credit" is actually the balance the gov pays directly to your insurance provider. You only pay your adjusted share, the gov pays the rest, and does not involve your tax return.
That's not how I understand the tax credit. You can get it in advance to help pay your premium. I dont think it's paid by the govt to the health insurer (but I'm not sure) but it does involve your tax return. There are other subsidies available to lower out of pocket costs.
"The ACA provides two forms of subsidies to help pay for health insurance. First, a monthly premium assistance tax credit
will lower the premium amount an individual or family must pay. Second, cost-sharing assistance
will limit a person's maximum out-of-pocket costs, and for some it will also reduce other cost-sharing requirements (i.e., deductibles, coinsurance, co-payments)."
Health Insurance 101
This is from healthcare.gov which explains things very well.
"The Affordable Care Act provides a new tax credit to help you afford health coverage purchased through the Marketplace. Advance payments of the tax credit can be used right away to lower your monthly premium costs. If you qualify, you may choose how much advance credit payments to apply to your premiums each month, up to a maximum amount. If the amount of advance credit payments you get for the year is less than the tax credit you're due, you'll get the difference as a refundable credit when you file your federal income tax return. If your advance payments for the year are more than the amount of your credit, you must repay the excess advance payments with your tax return. Also called premium tax credit."