President Moves to Fix ‘Family Glitch’ in Affordable Care Act
WASHINGTON — President Joe Biden on Tuesday will propose a new rule the administration believes will finally fix the so-called “family glitch” in Affordable Care Act coverage, a change that could potentially save hundreds of thousands of American families hundreds of dollars a month.
Under the ACA, people who do not have access to “affordable” health insurance through their jobs may qualify for a premium tax credit to purchase affordable, high-quality coverage on the ACA’s health insurance marketplaces.
Under Treasury’s new proposed rules, family members who have to pay more than 10% of their income for coverage will be able to get financial help under the Affordable Care Act.
“To borrow a phrase, this rule is a big deal,” a senior administration official said, making a reference to then-Vice President Biden’s famous, off-color remark when President Obama signed the health care bill into law.
“We’re excited about it. And we think it is a significant administrative action to improve implementation of the ACA that’s been taken since the law was first enacted,” the official said.
The “glitch” was created by the Internal Revenue Service in 2012 based on interpretation of an ACA rule.
It essentially based eligibility for a family’s premium subsidies on whether available employer-sponsored insurance is affordable for the employee only, even if it’s not actually affordable for the whole family.
According to the White House, the family glitch affects about 5 million and has made it impossible for many families to use the premium tax credit to purchase an affordable, high-quality Marketplace plan.
Should the new proposed rule, which is being promulgated through the Treasury Department and IRS, be finalized, family members of workers who are offered affordable self-only coverage but unaffordable family coverage may qualify for premium subsidies.
The White House estimates that once the proposed rule change is made, about 200,000 uninsured people would gain coverage, and nearly 1 million Americans would see the cost of their coverage come down.
During a briefing with reporters on Monday, a senior administration official called the proposed change “the most significant administrative improvement” to the ACA since it was enacted in March 2010.
Presently ACA premiums are at an all-time low, with four out of five Americans eligible for coverage for as low as $10 a month. Enrollment is also at an all-time high, with 14.5 million Americans taking advantage of the program, including nearly 6 million who newly gained coverage.
With the addition of Missouri and Oklahoma, two states that expanded Medicaid last year, nearly 19 million low-income Americans are enrolled in the ACA’s Medicaid expansion coverage, adding up to a record nearly 80 million children, pregnant women, seniors, people with disabilities, and other low-income Americans covered by Medicaid, the White House said.
In addition to announcing the proposed eradication of the family glitch, Biden is expected to sign his second executive order related to the Affordable Care Act and Medicaid since January directing federal agencies to continue to find ways to make health care more affordable.
These initiatives include but are not limited to making it easier for people to enroll in and keep their coverage; helping people better understand their coverage options so they can pick the best one for them; continuing to make health coverage more accessible and affordable by expanding eligibility and lowering costs for ACA, Medicare or Medicaid coverage; connecting people to health care services by improving access to health care providers and linkages between the health care system and communities to help people with health-related needs and taking steps to help reduce the burden of medical debt.
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