Improper Payment Findings

Combined Improper Payment Information

The APTC program represents the first of two potential payment streams for the overall Premium Tax Credit program.  The second payment stream relates to additional Premium Tax Credit amounts claimed by taxpayers at the time of their tax filings, referred to as “Net Premium Tax Credits” (hereafter, “Net PTC”).  That is, total Premium Tax Credit outlays /credits are equal to APTC payments plus Net PTC claims.  The combined APTC and Net PTC estimated improper payment rate is 1.62 percent, representing $784.46 million in improper payments out of $48.47 billion total Premium Tax Credit outlays / claims. 

In the ordinary course of preparing their tax filing, a consumer may claim a total Premium Tax Credit that is less than the APTC payments made on behalf of the consumer for the respective tax year.  For example, a consumer’s income for the tax year may exceed what the consumer anticipated when the consumer enrolled in health insurance coverage, resulting in eligibility for a lesser Premium Tax Credit benefit than expected.  The amount paid in APTC that exceed the total Premium Tax Credit a consumer is entitled to is referred to as “Excess APTC.”  A consumer may have an obligation to repay Excess APTC amounts, and such repayments may reduce monetary losses associated with improper payments.  The combined APTC and Net PTC improper payment information does not reflect any effects related to the repayment of Excess APTC.

The combined APTC and Net PTC improper payment information does not reflect payments made by State-based Exchanges.

The APTC improper payment rate is released in the Department of Health and Human Services (HHS) Agency Financial Report (AFR).