Provision of Reform Law Could Affect Access to Coverage for Families
A provision in the federal health reform law that denies government subsidies to workers whose employers offer affordable health coverage could inadvertently eliminate access to insurance for families, The Hill's "Healthwatch" reports.
According to the provision, if workers have to contribute more than 9.5% of their income toward employer-sponsored health benefits, they qualify for federal subsidies to purchase health plans through state insurance exchanges. Many family health advocates believed the so-called "firewall" also applied to family coverage.
However, the Joint Committee on Taxation in 2010 interpreted the measure to mean that workers and their families are not eligible for subsidies as long as the employer's individual plan is affordable, regardless of the cost of family coverage.
Advocates Voice Concern
Advocates say the cost of buying insurance for the entire family could be too high for some workers without subsidies. As a result, some families could go without coverage and face penalties under the reform law's individual mandate.
Jocelyn Guyer, deputy executive director at Georgetown University's Center for Children and Families, said, "It's going to be a massive problem if it comes out that families have to buy really expensive employer-based coverage."
She added that if the White House or Congress does not augment the rule to include family plans, "we're going to have middle-class families extremely unhappy with (health care) reform in 2014 because they'll basically be facing financial penalties for not buying coverage when they don't have access to affordable options."
The Obama administration is expected to clarify the rule shortly. While experts say lawmakers likely will change the policy to ease families' access to subsidies, a recent Employment Policies Institute study found that doing so could cost $50 billion annually.Judith Solomon, vice president for health policy at the Center on Budget and Policy Priorities, said the $50 billion estimate "seems very high," noting that children who are not covered by employer health plans are eligible for Medicaid or the Children's Health Insurance Plan (Pecquet, "Healthwatch," The Hill, 7/21). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.