The Biden administration is proposing a rule change to the Affordable Care Act (ACA) to fix the so-called “family glitch” that blocks millions of people who receive health care through a family member’s work from qualifying for assistance with coverage.
During a press call, a senior administration official said the Treasury Department on Tuesday will release a proposal to change ObamaCare’s rules, allowing individuals in households that spend more than 10 percent of their income on health insurance to qualify for financial assistance.
Under the current rules, the ACA provides financial assistance to single customers who spend more than 9.83 percent of their income on their company’s health plan premium.
Spouses and children who are covered by a family member’s company-provided health plan are considered to have affordable coverage by the ACA, regardless of what percentage of their income they put towards their health insurance. This rule prevents an estimated 5 million people from qualifying for subsidized healthcare plans.
With the Treasury’s “modified interpretation” of the ACA, if coverage costs more than 10 percent of a household’s total income, then nonemployee family members will be eligible for financial assistance during the next open enrollment period.
The Biden administration’s plan to address the “family glitch” was first reported by Politico.
According to the administration official, this rule change is expected to help around 200,000 uninsured people gain coverage for the first time and lower the premiums for nearly a million others. However, they acknowledged that some families may find it more convenient to stay under one health plan and not opt to move to a more affordable coverage plan under the proposed rule change.
Along with the rule change, President Biden will also be signing an executive orders that “directs agencies to continue their efforts to strengthen access to affordable high quality health care,” according to the senior administration official.
The proposed update to ObamaCare will be marked by an event at the White House on Tuesday, with former President Obama expected to be in attendance. It will be Obama’s first trip to the White House since leaving office in January 2017.
The senior White House official declined to specify what Biden’s executive order would include, but said it would include measures to make it easier for people to enroll, better understand their coverage options and protect them from “low-quality health insurance.”
