Mind the Obamacare “Family Glitch”

Financial Justice Health Care Ideas and Issues

May 27, 2022

            Buffalo River      When Obamacare, or more appropriately the Affordable Care Act, was passed a dozen years ago in 2010, part of the promise was that at some later time corrections would be made once experience revealed gaps and errors.   There was also an implicit assurance that over time, polarization would lessen allowing improvements in coverage and benefits.  The intervening years have established that the timeline for such fixes in more along the in the “by-and-by” somewhere close to never in most cases, as division has hardened even as these health protections have become more embedded in the what little safety net Americans have.

Some good news may be coming in the mending of a tear in the net which some health experts call the “family glitch” in a questionable piece of wordsmithing.  Sadly, this glitch is more like a huge chasm, especially for low waged workers and their families, but before I rain on the parade, lets have some applause for one of the bands.

Here’s the situation, and it’s one that we have often discussed over the years.  Basically, employers are required to offer a health insurance plan if they have more than 50 employees.  A plan is deemed “affordable” for the worker, if the cost is no more than 9% of the worker’s gross pay.  For lower waged workers, the fact that 9% is a significant hunk of a check that may be only $9 or $10 per hour or even $7.25, the federal minimum wage, this cost was often enough to discourage enrolling in the company’s plan.  Many, if not most, employers in the lower wage service and health care industry, offered fairly minimal plans and there were no caps put on deductibles, so often they ranged from $4000 to $6000 before a worker could get any benefit from the policy.  As a union, we often advised workers not to take the benefit, but to go to the marketplace, even without subsidies.  In another huge farcical gap, if the employer policy was deemed affordable even under these ridiculous standards, a worker could not get access to the subsidies that made marketplace health insurance somewhat affordable.  The “family glitch” meant that members of the family could also not access the marketplace and its subsidies either, if the worker could not afford family coverage.  In a Times’story, the Kaiser Family Foundation estimates that “The average premium paid by a covered worker for single coverage in 2021 was $108 a month, compared with $497 for family coverage….”  All of which means no one gets covered.

The IRS is taking comments on a regulation that would allow family members to access the marketplace and its subsidies even if the head of the family was ostensibly offered employer coverage.  Estimates indicate that this hurts five million people.  In receiving participation rates from employers represented by our union, we often find only a handful of workers out of more than thousands actually enroll in employer coverage in our healthcare facilities because of these gaps and glitches.  Some estimates find that more than 700,000 might enroll with subsidies, although the Biden administration claims that “200,000 uninsured people will gain health coverage, and nearly one million will have more affordable coverage under its proposed fix.”

Ok, better than nothing I guess, but with five million impacted, which I think is an undercount, and maybe only a couple of hundred thousand willing and able to gain coverage, and maybe 1 out of 5 having a cheaper opportunity, that’s more of a patch than a fix on the huge gaps and glitches that remain as scars on affordable health care.