- The Biden administration on Tuesday proposed a rule aimed at fixing the so-called "family glitch" in the Affordable Care Act to allow more families to qualify for subsidized coverage through the health insurance marketplace.
- If an employee's health coverage through their job is deemed "unaffordable," which is defined as having to spend more than 9.5% of household income on premiums, that worker is eligible for subsidized coverage through the marketplace. However, the subsidized coverage does not extend to family members, affecting an estimated 5 million people nationwide. The new Treasury Department and Internal Revenue Service proposal would help family members of workers qualify for tax credits to buy ACA coverage.
- The White House called the plan the most significant administrative action to improve the ACA since its enactment 12 years ago. Former President Barack Obama returned to the White House to mark the occasion, reuniting with President Joe Biden for a press conference announcing the new initiative.
Enrollment in ACA-subsidized health insurance plans climbed to a record high during the COVID-19 pandemic, with roughly 14.5 million Americans signing up through the exchanges for coverage in 2022, a 21% increase over the prior year. Additional financial subsidies provided by pandemic relief legislation and an extended signup period helped to boost exchange enrollment, but the assistance is set to expire at the end of this year.
The White House said about 5 million Americans are caught in the ACA's family glitch and unable to use the premium tax credit to purchase a marketplace plan. Research from the Kaiser Family Foundation has suggested that 2.8 million of those affected are children and 46% are low income.
"By strengthening this law so more families get subsidies on premiums, the White House is lowering insurance costs for many families who were left behind. This is a step in the right direction to getting all Americans the affordable coverage they need and deserve, which will strengthen the economy and better prepare us for future health emergencies,” said Heather Korbulic, senior policy and strategy lead at GetInsured.
Under the proposed regulation, family members of workers who are offered self-only coverage but unaffordable family coverage may qualify for premium tax credits to buy ACA coverage. The change could help an estimated 200,000 uninsured people gain coverage, and nearly 1 million Americans would see their coverage become more affordable. "Many families would be able to save hundreds of dollars a month thanks to lower premiums," the White House said.
Healthcare provider organizations welcomed the administration's plan to rectify the family glitch. The American Medical Association, which has long advocated for elimination of the glitch, said Biden was making good on his promise to make healthcare coverage more affordable.
The American Hospital Association said hospitals and health systems strongly back the administration's effort. "All Americans deserve access to comprehensive health care and coverage. We can get there by building on the Affordable Care Act," AHA CEO Rick Pollack said.
AHIP also issued a statement in support of the proposal. "We applaud the Administration for maintaining their focus on making health care more accessible and available, and we are confident that by working together, we can ensure that more families will benefit from affordable coverage that protects their health and financial stability," AHIP CEO Matt Eyles said.
The ACA was signed into law in 2010, when Biden was Obama's vice president. Obama's signature healthcare legislation has survived numerous efforts from Republicans in Congress to repeal it and attempts by the Trump administration to scale back its provisions.