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President Biden announces fix to family glitch in Obamacare subsidies

by Stacy M. Brown
October 11, 2022
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With an estimated 5.1 million people falling into the so-called family glitch—primarily children and women —the Biden administration has issued a rule that makes it easier for those with employer-sponsored health plans to get Affordable Care Act subsidies.

The rule, which comes from the Internal Revenue Service, fixes the glitch that prevented family members from receiving Obamacare subsidies if a household member had access to employer-sponsored healthcare coverage that meets specific requirements identified in the law.

Obamacare required that employer plans be affordable for employees. Unfortunately, it didn’t offer that same protection for family members.

“Health care should be a right, not a privilege. But for many Americans caught in the so-called family glitch, the peace of mind that health insurance brings has remained out of reach,” President Joe Biden offered in a statement.

“Because of this glitch, employer-based health insurance has been considered ‘affordable’ if the coverage is affordable for the employee even if it is not for their family members—making those family members ineligible for Affordable Care Act subsidies even though they need them to afford quality coverage.”

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In April, the president announced a proposal to fix what the administration called a regulatory flaw.
Beginning in November, families can sign up to take advantage of the change.

The White House said about one million Americans would either gain coverage or see their insurance become more affordable because of the new rule. “This marks the most significant administrative action since the law was first put into place,” Biden asserted.

“It builds on our progress so far, which has brought the rate of uninsured Americans to a record-low eight percent. My administration will continue working every day to lower costs and expand quality, affordable health coverage to all Americans.”

The Urban Institute estimated that eliminating the family glitch would decrease employer spending by roughly $2 billion annually. “Changing the family glitch would lower health care premiums for hundreds of thousands of affected families without undermining employer coverage,” researchers at the Urban Institute found.

“There would be a modest increase in health coverage, but the biggest effect would be to improve affordability. There would be a small increase in federal government spending and a tiny increase in state spending that would be at least partially offset by additional tax revenue.”

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Protecting and strengthening implementation of the Affordable Care Act remains key to increasing access to quality, affordable health care,” U.S. Department of Health and Human Services (HHS) Secretary Xavier Becerra wrote in a statement.

“Today’s action resolves a flaw in prior ACA regulations to bring more affordable coverage to about one million Americans. Our goal is simple: leave no one behind and give everyone the peace of mind that comes with health insurance,” Becerra stated.

He continued: “Under President Biden’s leadership, our nation’s uninsured rate is at an all-time low, and Affordable Care Act enrollment is at an all-time high. This is not by accident. We are meeting people where they are to tell them about their healthcare options through unprecedented outreach efforts.

“And through landmark legislation like the American Rescue Plan and the Inflation Reduction Act, we have offered the lowest ACA premium rates in history. Our work to expand coverage and lower healthcare costs for American families never stops.

“Whether you’re part of a family previously affected by this glitch, or an individual buying insurance on the marketplace, the Biden-Harris Administration is committed to ensuring you have access to the healthcare you deserve.”

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Stacy M. Brown is an NNPA Newswire senior national correspondent.

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