Biden looking to open up Obamacare subsidies to more families

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The proposed rule seeks to address a long-standing problem with Obamacare regulations related to the affordability of employer coverage, known as the “family ruling.”

Under the health reform law, workers who don’t have “affordable” health insurance options through their jobs may qualify for subsidized coverage in the Obamacare exchanges. A job-based policy is considered “affordable” if it costs the employee less than about 10% of their earnings for individual coverage.

However, the law does not take into account the increase in premiums for adding family members to the policy, even if it raises the cost above the threshold. In these cases, workers and their families are not eligible for financial assistance to purchase Affordable Care Act coverage.

The median annual premium for a single worker was just over $7,700 in 2021, but topped $22,000 for a family, according to the Kaiser Family Foundation.

Some 5.1 million Americans, most of them children, are affected by family failure, according to Kaiser.

The proposed rule would allow family members of workers who are offered affordable individual coverage but unaffordable family policies to qualify for subsidies in the Obamacare exchanges.

An estimated 200,000 uninsured Americans would gain coverage and nearly 1 million people would see premium reductions, according to the White House. Many families could save hundreds of dollars a month.

If finalized, the rule would take effect in January 2023.

The White House declined to comment on the cost of removing the family flaw, but the Congressional Budget Office previously pegged it at $45 billion over 10 years.

interest record

Biden and Obama are expected to tout increased interest in Affordable Care Act policies this year. A record 14.5 million people signed up for 2022 coverage during open enrollment, lured in part by enhanced federal subsidies.

Democrats’ $1.9 trillion coronavirus aid package, which was signed into law in March 2021, temporarily made the subsidies more generous and opened them up to more middle-class Americans. It also allows low-income Americans to enroll in $0 premium Obamacare coverage on the federal exchange outside of the open enrollment period.

Separately, nearly 19 million low-income American adults are enrolled in expanded Medicaid coverage, bringing total Medicaid enrollment to a record nearly 80 million people.

Biden is expected to sign an executive order Tuesday directing federal agencies to continue doing everything they can to expand quality, affordable health coverage, including making it easier for people to understand their options and enroll in and keep their policies.

It also calls for strengthening benefit generosity and improving access to health care providers, as well as protecting Americans from low-quality coverage and taking steps to reduce medical debt. The order also seeks to expand eligibility and lower costs for those with Obamacare, Medicare or Medicaid coverage and improve access to health care providers.

challenges ahead

However, the historic gains in the Affordable Care Act and Medicaid coverage may be short-lived.

Unless Congress acts, the enhanced subsidies will not be available for 2023 policies in the Affordable Care Act exchanges. Democrats’ plan to extend the provision as part of their Build Back Better spending package fizzled out last year when Democratic Sen. Joe Manchin of West Virginia said he would not support it.
And Medicaid enrollment has increased in large part because states haven’t been allowed to involuntarily drop anyone from coverage during the pandemic in exchange for more generous federal Medicaid matching under an approved coronavirus relief package. by Congress in 2020. However, states will go back to checking residents’ eligibility once the public health emergency is over, which could be as early as July.

An estimated 14.4 million people could lose Medicaid coverage if the public health emergency expires after the second quarter of this year, according to the Urban Institute.

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