Posts Tagged "premium"

Family under an umbrella

5 Million Families Caught in an ACA Glitch

The states’ health insurance marketplaces will sell subsidized family policies to workers who have employer coverage on one condition: their employer premiums are deemed unaffordable.

But this condition has a quirk. Under the Affordable Care Act (ACA), a worker is eligible to buy a subsidized family plan only if he can’t afford his employer’s premiums for an individual policy, defined in the law as exceeding 9.83 percent of his income. Policymakers argue this is the wrong standard, because the ineligible worker needs a family policy, and employers’ family policies usually have much higher premiums than their individual policies.

The Kaiser Family Foundation estimates some 5.1 million workers are in this predicament, which is known as the “family glitch.”

The majority of workers who are not eligible for the ACA’s family coverage are buying the policies at work, and they spend an average of 16 percent of their income on premiums, Kaiser said. The people who can’t afford the employer insurance are forced to go without.

Tina Marie Mueller’s family is caught in the family glitch. She recently wrote in Health Affairs that her husband pays $1,500 per month for employer health insurance for the family, including their two children. “So, after paying for our family insurance, my husband brings home $400/wk,” Mueller said. “We are beyond frustrated that this part of the ACA hasn’t been fixed.”

The COVID relief package passed in March did temporarily expand access to the exchanges for more middle-class Americans by dramatically increasing the premium subsidies. But “people in the family glitch will still not be helped,” said Krutika Amin, a health care expert at the Kaiser Foundation. …Learn More

ACA Eased the Financial Burden on Families

Woman and baby at the doctors

The Affordable Care Act (ACA) has reduced families’ medical costs significantly.

The ACA’s main goal was to provide coverage for the first time to workers who lack employer health insurance. But the expansion of free or subsidized health care to millions of parents with low and modest incomes has improved their financial stability and freed up money for their families’ other critical needs, concluded a new University of California at Davis study.

The main way the ACA expanded coverage was by giving states the option of providing Medicaid to workers earning up to 138 percent of the federal poverty level. The law also increased the number of children with health insurance, because federal and state outreach during the Medicaid expansion raised parents’ awareness of two separate insurance programs that had long been available to children: Medicaid and the Children’s Health Insurance Program. To help families with modest incomes, the health care law put a cap on their annual medical spending.

Prior to the ACA’s passage, out-of-pocket medical costs were a high financial burden for 15 percent of U.S. families. That has fallen to about 10 percent of families in the years since passage, the researchers said.

What qualifies as a high cost burden depends on the family’s income. One example: the researchers determined that a family earning $75,000 had a high cost burden if they paid more than 8.35 percent of their income for out-of-pocket deductibles and copayments.

However, the study is not a current picture of the situation, because it was based on data from health care spending surveys in 2000 through 2017, prior to the pandemic. During the past year, millions of people were laid off and lost their employer health insurance when they may need it most.

But the ACA’s benefits are clear, the researchers said. Another aspect of the reform was to allow workers who earn too much to qualify for Medicaid to purchase subsidized private health insurance on the state exchanges. The law capped the total that workers spend on health care – once they reach the cap, their care is fully covered. …Learn More