Some Families to Be Priced out of Health Overhaul

NCPA February 1, 2013

Some families could get priced out of health insurance due to what's being called a glitch in President Barack Obama's overhaul law. IRS regulations issued Wednesday failed to fix the problem as liberal backers of the president's plan had hoped, says the Associated Press.

As a result, some families that can't afford the employer coverage that they are offered on the job will not be able to get financial assistance from the government to buy private health insurance on their own. How many people will be affected is unclear.

• Bruce Lesley, president of First Focus, an advocacy group for children, cited estimates that close to 500,000 children could remain uninsured because of the glitch.
• The problem seems to be the way the law defines affordable.

Congress says affordable coverage can't cost more than 9.5 percent of family income. People with coverage the law considers affordable cannot get subsidies to go into the new insurance markets. The purpose of that restriction is to prevent a stampede away from employer coverage.

Congress went on to say that what counts as affordable is keyed to the cost of self-only coverage offered to an individual worker, not his or her family.

• A typical workplace plan costs about $5,600 for an individual worker.
• But the cost of family coverage is nearly three times higher, about $15,700, according to the Kaiser Family Foundation.

So if the employer isn't willing to chip in for family premiums -- as most big companies already do -- some families will be out of luck. They may not be able to afford the full premium on their own, and they'd be locked out of the subsidies in the health care overhaul law.

Source: Ricardo Alonso-Zaldivar, "Some Families to Be Priced out of Health Overhaul," Associated Press, January 30, 2013.