Biden-Harris administration officials announced Tuesday that there are plans to fix a “glitch” in the Affordable Care Act that impacts millions, including 200,000 people who are soon expected to gain coverage for the first time.
Also known as “Obamacare,” the ACA was passed in 2010, when President Joe Biden was serving as vice president under former President Barack Obama.
“The ACA was never perfect, and we always knew we would have to make it better,” Obama said Tuesday in a Twitter thread.
According to the White House, under the current version of 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. However, family members are ineligible for the tax credit.
“For family members of an employee offered health coverage through an employer, the cost of that family coverage can sometimes be very expensive and make health insurance out of reach,” said the White House.
“For single people, “affordable” means coverage that costs less than about 10 percent of their income,” said a senior administration official. When spouses and children are offered coverage through a family member’s job, they’re treated as having “affordable” coverage regardless of what the actual cost is to them.
“That could mean that families would have to pay 25 or 30 percent of income to get coverage through their employer, and they can’t get financial help under the ACA, under today’s rule,” a senior administration official explained.
Although administration officials estimate that the “family glitch” impacts 5 million people, the senior official told reporters some people may chose to keep coverage they already have even when it is fixed.
“So, as a result, about 200,000 uninsured people are expected to gain coverage for the first time because they don’t – they have no coverage at all, say because it’s just too expensive for them,” the official explained.
According to a survey released in February from Affordable Health Insurance, 23% of Americans have medical debt.
To borrow a phrase, this rule is a big deal,” said the administration official. “We’re excited about it.”
Hundreds of thousands of families could save hundreds of dollars each month with the change, which the administration describes as “the most significant administrative action to improve implementation of the ACA since its enactment.”
When asked how the glitch would be funded, the senior official said the Treasury Department is responsible for interpreting the provisions of 36B of the ACA. They also said the Treasury has recommended that the glitch fix be implemented as of Jan. 1, 2023, meaning people would be able to get financial assistance through the ACA during the next open enrollment period.
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